Operating profit

What the core business alone earned

In detail

Operating profit is revenue minus cost of sales minus selling and administrative expenses. It shows what the actual business earns, leaving out interest on debt and one-off items like asset sales. That is why it is often the figure people watch most closely when judging a company's earning power.

Example

Revenue of 500 less 300 of cost of sales leaves gross profit of 200. Take out 150 of expenses and operating profit is 50.

Related terms

Revenue Ordinary profit Operating margin

Read in the app (App Store)

For learning, not investment advice. Decisions are your own.