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What is operating income?

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Quick answer

Operating income is the profit a company makes from its core business operations, before interest and taxes. It's revenue minus operating costs (like wages, materials, and rent) — a clean measure of how profitable the actual business is. It's profit from core operations, before interest and tax.

Key things to understand

  1. It's profit from core operations, before interest and tax.
  2. Revenue minus operating expenses.
  3. It excludes one-off and financing items.
  4. It shows how profitable the core business is.

People also ask

What is operating income?
A company's profit from its core operations, calculated as revenue minus operating expenses, before interest and taxes.
What's the difference between operating income and net income?
Operating income excludes interest and taxes; net income is the final profit after everything is deducted.
Why does operating income matter?
It isolates how well the core business performs, separate from financing and tax effects.