Definition of Operating income:
Operating income is an accounting figure that measures the amount of profit realized from a business's operations, after deducting operating expenses such as wages, depreciation, and cost of goods sold (COGS).
Operating income–also called income from operations–takes a company's gross income, which is equivalent to total revenue minus COGS, and subtracts all operating expenses. A business's operating expenses are costs incurred from normal operating activities and include items such as office supplies and utilities.
Income resulting from a firms primary business operations, excluding extraordinary income and expenses. Also called earnings before interest and taxes (EBIT), it gives a more accurate picture of a firms profitability than gross income. Also called operating margin. Formula: Sales revenue - (Cost of sales + Operating expenses).
How to use Operating income in a sentence?
- The total amount of money that is needed to run your busness, this can include supplies, labor, utilites rent etc this is operating income.
- Analyzing operating income is helpful to investors since it doesn't include taxes and other one-off items that might skew profit.
- Operating income takes a company's gross income, which is equivalent to total revenue minus COGS, and subtracts all operating expenses.
- The floundering companys operating income decreased substantially due to customer traffic dwindling in light of the devastating hurricane and subsequent mass evacuation.
- If you are trying to decide what your budget should be for a project you need to know your companies full operating income .
- Operating income reports the amount of profit realized from a business's ongoing operations.
Meaning of Operating income & Operating income Definition