What is the concept of sustainable income Can you give an example of what this number may look like by using the income statement of a real-life company?

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2026-04-24 23:30

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Estimating Sustainable IncomeWhen evaluating a company, it generally makes sense to eliminate all irregular items inestimating future sustainable income.

To address this dilemma, many trustees and institutions are beginning to distribute what might be called "sustainable income" to the income beneficiary (or to the operating budget of an endowed institution, e.g.). The thinking seems to be that what a donor had in mind when he/she specified "income [or income only]…" is that the donor wanted the income beneficiary to enjoy a long-term, sustainable income stream (perhaps growing to keep up with inflation). A further presumption is that the donor further wanted the principal to be protected against loss (including loss due to inflation) for continual production of income or for eventual distribution/use by the institution.

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