Operating income



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if the company borrows 5 cr for immediate expansion to thrive in market competition,that sould be considered a part of operating expense right,it should primarily effect operating income ,but it was s given net income as the answer

3 Answer(s)


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If a company borrows 5 crores it will be added to the balance sheet. Only the interest amount will be included in the income statement.

This interest expenses is not an opex because paying down interest is not directly related to the core operations of the company (which could be making pizzas, IT software etc). Hence since interest expenses is a non-operating expense and net income is affected.

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