Operating income is a key financial metric that reflects a company's profitability from core business operations. It is calculated by subtracting operating expenses, such as wages, rent, and cost of goods sold, from total revenue. Unlike net income, it excludes taxes and interest, providing a clearer picture of operational efficiency. A higher operating income indicates strong business performance, while a decline may signal inefficiencies. At YourLegal.org, we help businesses understand financial statements to make informed decisions. Monitoring operating income regularly can guide strategic planning and improve overall profitability. Visit YourLegal.org to learn more about financial management.
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