Operating Profit?



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I am pursuing Investment Banking n Financial Modelling course,I know about gross margin,operating income..My question is where will we put OPERATING PROFIT?

4 Answer(s)


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The profit earned from a firm's normal core business operations. This value does not include any profit earned from the firm's investments (such as earnings from firms in which the company has partial interest) and the effects of interest and taxes.

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I know the definition,Thx.My question was where we will put operating profit in P& L account.

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Good question Swati. I feel it should be deducted as an Operating Expense, but it totally depend on the company that they want to show it on the income statement directly as P/L, or hidden under some acronym like "Administrative Cost." Binny will help us out on this. Thanks!

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Operating profit is the income that is earned from the normal/ routine business operations of a firm. Doesnot include the additional income the company might make from its investments.

It is also known as EBIT- Earnings Before Interest & Taxes or Operating income.

So, Operating Profit = Revenue- COGS- Operational expenses.

Like Saumitra mentioned, it varies from company to company what all expenses are included in its operational expenses.

Thanks!

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