Article Excerpt...
If you want insights into how a company’s business is performing, operating income is a key metric to understand. Operating income measures the profitability of a company’s core business operations after deducting all operating expenses. It shows how efficiently the company can generate cash from its business operations. By excluding the effect of taxes, interest and one-time events such as acquisitions and write-offs, operating income helps managers, investors and lenders hone in on the fundamentals of the company’s core business.
If you want insights into how a company’s business is performing, operating income is a key metric to understand. Operating income measures the profitability of a company’s core business operations after deducting all operating expenses. It shows how efficiently the company can generate cash from its business operations. By excluding the effect of taxes, interest and one-time events such as acquisitions and write-offs, operating income helps managers, investors and lenders hone in on the fundamentals of the company’s core business.
