Operating Income

Operating income, also known as operating profit, is the amount of money a company makes from its core business activities before deducting interest and taxes. It is calculated by subtracting the costs directly related to producing goods or services—such as wages, raw materials, and overhead—from total revenue. Operating income indicates how efficiently a company is managing its primary operations and profitability. A higher operating income generally reflects strong core business performance, while a lower or negative figure may signal issues needing attention. It’s a key measure for assessing a company's operational health and profitability.