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Definition of Operating Income

Definition: What is the Operating Income?

Operating Income referred to as EBIT often. Operating income formula is used to calculate the profit of the company derived from the operations of the company.

In other words, Operating income calculate the amount which is generated by the core activity of the business.

Definition of Operating Income

For investors and creditors, this is very important calculations because by using this calculation they analyze the performance of the core activities of the business.

This measurement is used to separate the operating revenue and expenses from non-operating revenue and expenses which help the external users to analyze, how the company makes money.

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