Quick Definition

Operating income, also known as operating profit, represents the total earnings from a company's core business operations, excluding non-operating income, taxes, and interest expenses.

Formula

Examples

• 1A manufacturing company reports an operating income of $500,000 after deducting all operational costs from its sales revenue.
• 2A retail store's operating income is calculated by subtracting the cost of goods sold and operating expenses from its total revenue.
• 3A tech company's operating income increases after reducing its administrative expenses and optimizing its production process.

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