Ordinary profit

Operating profit plus the routine financial items

In detail

Ordinary profit takes operating profit, adds recurring non-operating income such as interest and dividends received, and subtracts non-operating costs such as interest paid. It gathers what happens year in and year out, so a heavily indebted company shows less than its operating profit. One-off items stay out, which makes it a read on normal performance.

Example

Operating profit of $50 million, plus $2 million interest received, less $7 million interest paid, gives $45 million.

Related terms

Operating profit Net income Income statement

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