Operating Income

What is Operating Income?

Operating income is a company's income from its normal business operations, before taking into account non-operating items such as taxes, interest, and other types of income or expense. It is calculated by subtracting operating expenses from gross profit.

Operating income is an important financial measure for a company, as it reflects the efficiency and profitability of the company's core business operations. It is used to evaluate a company's financial performance and to compare the performance of different companies within the same industry.

For example, a company with a high operating income may be considered more efficient and profitable than a company with a low operating income, all else being equal. A company with a rising trend in operating income over time may also be viewed as more financially successful than a company with a declining trend.

Operating income is often used in conjunction with other financial measures, such as net income and return on investment, to provide a more complete picture of a company's financial performance.

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