Income Statement Operating Results

Top shelf service typically results in higher operating expenses on the income statement but in exchange you often get much higher customer retention rates and the freedom to charge higher prices.

Income statement operating results. Image by sabrina jiang. At the top of an income statement you see the phrase years ended or fiscal years ended and the month the period ended for an annual financial statement. These include compensation related expenses sales and marketing costs and miscellaneous office expenses like utilities and office supplies. Operating profit is the profit earned from a firm s normal core business operations.

Income statements reflect an operating period which means that they show results for a specific length of time. Statement of operating results. Below is the 2017 income statement for j c. Formula for operating income.

We can see that operating income is the result of gross income or gross margin on apple s income statement of 20 2 billion minus operating expenses of 8 6 billion. There are three formulas to calculate income from operations. This value does not include any profit earned from the firm s investments such as earnings from firms in which. Operating income total revenue direct costs indirect costs.

The highlighted areas include operating income and net income to demonstrate how the figures are. Penney as reported on their 10 k annual statement. Operating income gross profit results from subtracting a company s cost of goods from its gross revenue. Below gross profit on an income statement you ll find the firm s operating expenses.