Income From Operations Vs Operating Income

It s important to note that operating income is different than net income as well as gross profit.

Income from operations vs operating income. Income from operations only involves revenue and expenses involved in the day to day run of the business. Operating income includes expenses. Operating income net earnings interest expense taxes. Income from operations is a general expression describing revenue a company earns from primary business.

The key difference between operating income and net income is that operating income refers to the income earned by a business organization during the period under consideration from its principal revenue generating activities and does not consider non operating income and non operating expenses whereas net income refers to earnings of the business which is earned during the period after considering all the expenses incurred by the company during that period. Net income was 131 million highlighted in green. There are three formulas to calculate income from operations. Operating income is used to calculate your company s operating margin which determines your operating efficiency.

For investors the operating income helps separate out the earnings for the. Interest expense was 71 million while tax expense was 52 million highlighted in red. Operating income includes more expense line items than gross profit which primarily includes. Operating income total revenue direct costs indirect costs.

Operating income was 238 million highlighted in blue. Operating income gross profit operating expenses depreciation amortization. Operating income and net income are two essentially calculated profits in the income statement. The key difference between operating income and net income is that while operating income is the income caused by the conducting business operations net income is the profit left after considering all the expenditure incurred.

Operating income is revenue less any operating expenses while net income is operating income less any other non operating expenses such as interest and taxes. As such operating income is a more accurate representation of a company s profitability than gross income. Operating income is a company s profit after subtracting operating expenses or the costs of running the daily business.