Operating income

Operating income,

Definition of Operating income:

  1. 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).

  2. 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.

  3. 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?

  1. The total amount of money that is needed to run your busness, this can include supplies, labor, utilites rent etc this is operating income.
  2. Analyzing operating income is helpful to investors since it doesn't include taxes and other one-off items that might skew profit.
  3. Operating income takes a company's gross income, which is equivalent to total revenue minus COGS, and subtracts all operating expenses.
  4. The floundering companys operating income decreased substantially due to customer traffic dwindling in light of the devastating hurricane and subsequent mass evacuation.
  5. If you are trying to decide what your budget should be for a project you need to know your companies full operating income .
  6. Operating income reports the amount of profit realized from a business's ongoing operations.

Meaning of Operating income & Operating income Definition