Method
EARL translates official U.S. economic-account data into a business-facing income-statement framework while preserving the underlying source concepts, formulas, and provenance.
How the National EARL translation works
National Annual example. National is used here as the primary example. Corporate and Industry follow the same EARL translation principles, but available concepts and statement lines differ by scope and frequency.
What EARL is doing
The translation above involves three distinct operations. Each published line is either source-supplied or transparently calculated from defined EARL concepts.
Present official economic-account concepts through a business-facing statement framework.
Many EARL rows preserve an official source value while presenting it with familiar financial-statement terminology. The original economic concept remains visible through EARL methodology and metadata.
Build transparent statement subtotals from defined components.
Some EARL lines combine source-backed components according to an explicit formula. The underlying components remain visible and traceable rather than being hidden inside the subtotal.
Calculate additional analytical measures from defined EARL lines.
EARL derives selected measures using explicit formulas, including margins and analytical profit measures. Derived measures are identified as such in the metadata.
What the National statement means
The National EARL statement applies a business-facing income-statement structure to economy-wide U.S. domestic production. Its measures come from BEA’s national and industry economic accounts rather than from company financial statements.
EARL terminology is intended to make relationships among production, purchased inputs, value added, labor costs, production taxes, and capital income easier to interpret. The labels are analytical analogues, not assertions that national-account concepts are formally identical to company-accounting measures.
National Gross Revenue
Gross Revenue is EARL’s presentation of BEA Gross Output. Gross Output measures the value of goods and services produced and is principally measured using industry sales or receipts. It includes sales to final users as well as sales between industries. BEA definition
This makes Gross Output useful as an economy-wide top-line revenue analogue. Unlike consolidated company revenue, however, transactions between industries remain in Gross Output. The same intermediate product can therefore appear at multiple stages of the production chain. BEA explanation
National Cost of Goods Sold
Cost of Goods Sold is EARL’s presentation of BEA Intermediate Inputs. Intermediate Inputs are goods and services used in producing other goods and services rather than sold for final consumption. They include energy, materials, and purchased services. BEA definition
EARL uses the COGS label because these inputs represent purchased production inputs consumed in generating output. The analogy does not imply that BEA Intermediate Inputs follow company-specific COGS classification rules.
National Gross Profit
Gross Profit is EARL’s presentation of economy-wide value added. Value added equals Gross Output less Intermediate Inputs. Across all industries, the sum of value added equals GDP. BEA definition
National Gross Profit should therefore not be interpreted as an amount retained by businesses. It represents new value created through domestic production and is distributed among employee compensation, taxes on production and imports less subsidies, and gross operating surplus. BEA GDP-by-Industry guide
Operating Expenses
Below Gross Profit, EARL presents the principal labor and production-tax components individually:
- Wages and Salaries
- Supplements to Wages and Salaries
- Total Employee Compensation
- Taxes on Production and Imports
- Less: Subsidies
Employee Compensation consists of wages and salaries plus employer supplements such as pension, insurance, and government social-insurance contributions. BEA definition
Taxes on Production and Imports include items such as excise taxes, customs duties, sales taxes, property taxes, licenses, severance taxes, and special assessments. They are distinct from corporate income taxes. Subsidies are monetary grants paid by government agencies to private businesses or government enterprises. BEA taxes definition · BEA subsidies definition
EARL then constructs Total Operating Expenses as:
Total Employee Compensation + Taxes on Production and Imports − Subsidies
The underlying components remain visible in the statement.
National EBITDA
For National Annual, EARL presents reported BEA Gross Operating Surplus as the primary EBITDA analogue. Gross Operating Surplus is derived after Intermediate Inputs, Employee Compensation, and Taxes on Production and Imports less Subsidies are deducted from output. It includes Consumption of Fixed Capital and several business- and property-income components. BEA definition
Its position in the production-income structure makes it useful as an economy-wide EBITDA analogue, but it is not equivalent to a sum of company-reported EBITDA.
For National Quarterly, EARL instead presents EBITDA (Calculated):
Gross Profit − Total Operating Expenses
Reported Gross Operating Surplus and calculated EBITDA remain separately identified in EARL metadata.
Depreciation
EARL presents BEA Consumption of Fixed Capital as Depreciation. Consumption of Fixed Capital measures the decline in fixed-asset value caused by wear, obsolescence, accidental damage, and aging. BEA describes it as its economic measure of depreciation. BEA CFC definition
The concepts are closely related, but BEA’s measure is based on current-cost economic depreciation rather than company book depreciation based on historical cost. BEA depreciation definition
Operating Income (EBIT)
EARL presents Net Operating Surplus as Operating Income (EBIT). BEA describes Net Operating Surplus as a profits-like measure after Employee Compensation, Taxes on Production and Imports less Subsidies, and Consumption of Fixed Capital, but before financing costs and business transfer payments. BEA definition
This makes it useful as an EBIT analogue while preserving the distinction from company-reported operating income.
Interest Expense
EARL presents BEA Net Interest and Miscellaneous Payments, Domestic Industries in the Interest Expense position of the statement. The source is a net national-accounts concept and includes miscellaneous payments. It should therefore not be interpreted as aggregate gross corporate interest expense.
Income Before Taxes
Income Before Taxes (EBT) is an analytical measure derived by EARL:
Operating Income (EBIT) − Interest Expense
It is not an official BEA EBT series and should not be equated with BEA corporate profits before tax. BEA’s corporate-profit measure applies specifically to entities treated as corporations and follows a different profit bridge. BEA corporate profits definition
What does “National” cover?
The National statement represents economy-wide domestic U.S. production—not only incorporated businesses. BEA’s GDP-by-Industry accounts measure the contribution of private industries and government to U.S. GDP. BEA industry overview
National EARL should therefore be interpreted as an analytical income statement for domestic production, not as a consolidation of U.S. company financial statements.
How the EARL views differ
EARL uses a common business-facing framework across National, Corporate, and Industry data. The underlying source concepts are not identical, however, so the three views do not contain exactly the same statement lines.
| Feature | National | Corporate | Industry |
|---|---|---|---|
| Perspective | Economy-wide domestic production | Domestic corporate sector | Individual industries and industry aggregates |
| Gross Revenue / COGS | Available | Statement begins below these concepts | Available |
| Gross Profit | Available | Available | Available |
| Operating-cost detail | Detailed | Corporate-specific structure | More limited |
| Annual EBITDA | Reported GOS basis | Calculated | Reported GOS basis |
| Quarterly EBITDA | Calculated | Calculated | Not part of the primary quarterly statement |
| Depreciation / EBIT | Available | Available | Not part of the primary Industry statement |
| Corporate tax / dividend bridge | No | Yes | No |
| Industry selection | No | No | Yes |
National
National provides the broadest economy-wide production view and extends from Gross Revenue through Income Before Taxes.
Corporate
Corporate focuses on the domestic corporate sector. BEA defines corporate business according to entities treated as corporations in the national accounts. BEA corporate-business definition
The EARL Corporate statement begins at Gross Profit because its source structure does not provide the same Gross Revenue/COGS presentation used in the National and Industry views. It then provides a deeper corporation-specific bridge through corporate income taxes, Net Income, Dividends, and Retained Earnings.
Industry
Industry applies the production-side framework to individual industries and industry aggregates.
Annual Industry data support the fuller production structure, including Gross Revenue, COGS, Gross Profit, Operating Expenses, reported-GOS EBITDA, and margins. Quarterly Industry currently supports the shorter production-side statement through Gross Profit and Gross Margin.
Why annual and quarterly statements can differ
EARL presents only concepts supported for the selected scope and frequency. A quarterly statement is therefore not necessarily the annual statement repeated four times per year.
Examples include:
- detailed Energy, Materials, and Purchased Services inputs are available annually but not in the corresponding National or Industry quarterly statement;
- National Annual uses reported Gross Operating Surplus as its primary EBITDA measure, while National Quarterly uses EBITDA (Calculated);
- Industry Quarterly currently ends at Gross Profit and Gross Margin.
EARL preserves these differences rather than filling unsupported statement lines simply to create a uniform appearance.
From official source data to EARL
Official source data
EARL begins with official source tables identified through its source metadata. Data retrieval is separated from EARL’s business-facing terminology and calculations so that the original source observations remain distinguishable from later transformations.
Processing & provenance
Source observations are matched to EARL concepts using documented metadata. The processing layer verifies expected source information and units, combines current and historical source layers where needed, and records provenance for populated observations.
Missing observations remain explicit rather than being silently inferred merely to complete a statement.
EARL concepts & calculations
After source observations have been identified, EARL applies its public terminology and calculates explicitly defined derived measures. Formulas refer to defined EARL concepts, for example:
Total Operating Expenses = Total Employee Compensation + Taxes on Production and Imports − Subsidies
Gross Margin = Gross Profit / Gross Revenue
Derived measures remain identifiable as calculations rather than source-supplied values.
Quality checks
The data process includes checks for source matching, units, duplicate observations, numerical validity, provenance, defined formulas, and accounting relationships.
Public releases receive additional review of displayed values, labels, dates, units, source information, and rendered outputs.
Public data & metadata
Public EARL metadata document what each published series means and how it was produced. Depending on the series, the metadata can identify:
- the EARL label;
- the official source concept;
- whether the value is source-supplied or EARL-derived;
- the formula and input series for derived measures;
- units and availability;
- the source agency, table, and source line;
- methodology and interpretation notes.
A separate statement layout defines how the same concepts appear in the public Income Statements, including row order, hierarchy, indentation, and presentation signs.
Methodological topics
Source data & provenance
EARL primarily uses official data from the U.S. Bureau of Economic Analysis, including the National Income and Product Accounts and Industry Economic Accounts.
Source information is retained so users can trace published measures back to the relevant official concept and table.
Statement construction
EARL distinguishes source-supplied concepts from constructed subtotals and derived analytical measures.
The data and metadata determine what a measure is; the statement layout determines how it is displayed.
Frequency & availability
Availability differs across scopes, frequencies, source tables, and historical periods.
An unavailable observation is not treated as zero. Where a concept is not supported for a given statement, EARL leaves it unavailable rather than filling the gap with an unrelated substitute.
Industry structure
Industry observations are organized through a maintained hierarchy connecting individual industries, aggregates, and the All Industries view.
This allows the same EARL concept to retain a consistent identity while being observed for different industries.
Price & quantity measures
EARL also uses BEA chain-type price and quantity indexes for selected Gross Output and Intermediate Input concepts. These data support analysis that distinguishes nominal changes from changes in prices and quantities.
More detailed decomposition methodology will be documented alongside the associated analytical products.
Derived analyses
EARL calculates selected ratios and analytical measures from explicitly defined inputs.
Examples include Gross Margin, EBITDA Margin, Operating Margin, EBT Margin, Effective Tax Rate, Payout Ratio, and Retention Ratio. Availability varies by statement scope and frequency.
Historical Industry reconciliation
Historical BEA Industry data do not always use the same industry classifications or coverage as current releases. EARL therefore uses a documented reconciliation process to extend selected annual Industry series while preserving the current industry structure and source provenance.
Current taxonomy as the reference
The current BEA industry taxonomy serves as the reference structure. Historical categories are connected to the current hierarchy only where a defensible mapping exists.
Historical source
The historical layer uses BEA Historical Industry Accounts released on November 30, 2021.
Current-dollar series
For the reconciled annual Industry series, official historical current-dollar values are used through 1996, while current BEA data take precedence from 1997 onward.
Price and quantity indexes
Historical price and quantity indexes retain their historical growth patterns but are re-anchored to the current series using the 1997 overlap.
Conceptually:
Re-anchored historical index = Historical index × (Current 1997 index / Historical 1997 index)
No fabricated historical splits
When a historical category combines activities that later appear as several separate industries, EARL does not allocate the historical value among those modern industries without an official basis.
If a defensible one-to-one history cannot be established, the historical observation remains unavailable.
Statement components
The historical reconciliation also provides a consistent value-added block—Employee Compensation, Taxes on Production and Imports less Subsidies, and Gross Operating Surplus—from 1987 onward where supported by the source material.
Provenance
The reconciliation preserves documentation of the historical source, taxonomy crosswalk, current-versus-historical precedence, index anchors, omissions, and observation provenance.
Validation & quality assurance
EARL validates both the underlying data and the public presentation.
Validation can include:
- comparison with official source evidence;
- verification of source mappings and metadata;
- formula and accounting-identity checks;
- expected-missingness checks;
- historical-source and reconciliation checks;
- statement and chart value checks;
- review of labels, dates, units, scaling, sources, and rounding;
- clean website and document rendering.
Validation documentation is retained so that the evidence supporting a published EARL release can be reviewed.
Interpretation & limitations
Analytical analogues, not company-accounting identities
EARL uses familiar business terminology to make economic-account relationships easier to interpret. The labels do not imply that national-account measures follow GAAP, IFRS, tax-accounting, or company-reporting definitions.
Aggregate accounting differs from firm accounting
The National statement describes domestic economic production rather than a consolidation of company financial statements. For example:
- Gross Revenue includes inter-industry transactions;
- Gross Profit represents economy-wide value added;
- reported-GOS EBITDA contains components broader than company EBITDA;
- Interest Expense is based on a net national-account source concept;
- National EBT is an analytical calculation defined by EARL rather than an official BEA measure.
Availability is not uniform
A concept may be available annually but not quarterly, available in one EARL scope but not another, or published only as supplemental information. EARL preserves those differences rather than creating unsupported values solely to make statements look identical.
Missing is not zero
An unavailable observation should not be interpreted as zero. Missing data remain explicitly unavailable unless a documented EARL calculation provides the value.
Source data can be revised
BEA periodically revises economic statistics as additional information becomes available and as statistical methods or classifications change. EARL therefore distinguishes changes in the official source data from changes made within EARL itself.
Revisions & versioning
Published values can change for different reasons. EARL distinguishes among:
Detailed versioning, release-history, and citation guidance will be added as the EARL release archive is finalized.