Operating income: Difference between revisions
WikiSysopIG (talk | contribs) Created page with "'''Operating income''' is the profit generated from an entity's principal operating activities after deducting operating expenses from revenue, but generally before interest expense, income taxes, and other non-operating items. It is also commonly referred to as '''operating profit''' or '''earnings before interest and taxes''' (EBIT), although the precise definitions may differ depending on the accounting or analytical context. Operating income is used to evaluate..." |
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<math> | <math> | ||
\text{Gross Profit} | \text{Gross Profit} = \text{Revenue} - \text{Cost of Goods Sold} | ||
= | |||
\text{Revenue} | |||
- | |||
\text{Cost of Goods Sold} | |||
</math> | </math> | ||
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<math> | <math> | ||
\text{Operating Income} | \text{Operating Income} = \text{Gross Profit} - \text{Operating Expenses} | ||
= | </math> | ||
\text{Gross Profit} | |||
- | |||
\text{Operating Expenses} | |||
where operating expenses exclude costs already included in cost of goods sold. | where operating expenses exclude costs already included in cost of goods sold. | ||