Why you have deducted interest from Operating income to calculate Net income?



0
Why Ive to deduct the interest with operating income the fomular should be like

Net income=Operating income+interest -tax is not it?!

1 Answer(s)


0

Net Income = Op Income - Interest - Tax.
Interest is an expense and hence has to be deducted. Why would you add it ?
Since interest is not directly related to operations of the company (not relevant to the core product or the service) it is considered as non-operating expense