How does interest expense affect net income in an income statement?


2 Answer(s)


Hi,

I am not sure what you mean by revenue has been borrowed. Revenue is money the company makes by selling its products. It is not borrowed from anyone.

Revenue - Operating Expenses = Operating Income. Interest is paid from money that is left over in the operating income hence it is represented as a % of operating income. Since interest is a non-operating expenses it is not include in operational expenses.

oh yes sir.i was mistaken.Thank you so much