Operating income is the income earned from engaging in the main business. Refers to a certain period of time, the commercial enterprise sales of goods or the provision of labor services earned monetary income.

Profit is the operating results of a business in a certain accounting period, which is divided into operating profit, gross profit and net profit. Formula:

Operating Profit = Operating Income - Operating Costs - Operating Taxes - Period Expenses - Asset Impairment Losses + Net Gain on Changes in Fair Value + Net Gain on Investments

Operating Income is the main source of profit.

Expanded Information

The Significance of Operating Income to an Enterprise

1. Operating income is a source of funds for enterprises to compensate for the depletion of production and operation. The realization of business income is related to the enterprise in the normal conduct of production activities, strengthen the management of business income, can make the enterprise's various expenditures to be reasonable compensation, is conducive to the smooth progress of reproduction activities.

2. Operating income is the main business results, is an important guarantee of profit. Strengthen the management of operating income is one of the important means of realizing the financial objectives of enterprises.

3. Operating income is an important part of the enterprise cash inflow. Strengthening the management of operating income can prompt enterprises to study and understand the changes in market demand, in order to make the correct business decisions, to avoid blind production, which can improve the quality of enterprises and enhance the competitiveness of enterprises.

References

Baidu Encyclopedia-Operating Income