Operating Income Vs Total Revenue

Gross profit is total revenue minus costs of goods sold cogs.

Operating income vs total revenue. Operating income gross profit operating expenses depreciation amortization. The net sales are its top line. Sales have more to do with the volume of business transacted while revenues are the amounts of money generated from sales. Operating income is also calculated by subtracting operating expenses from gross profit.

Operating versus nonoperating revenue operating revenue is earned from sales of the products or services that the company exists to sell while nonoperating revenue is income received from other sources including one time transactions such as the sale of property or out of date inventory. Gross profit 4 3 billion total revenue of 12 5 billion cogs of 8 2 billion. Operating revenue is generated by a company s primary business activities. Penney earned 116 million in operating income while earning 12 5 billion in total revenue.

The total operating expenses exclude additional expenses outside the regular running of the business such as taxes interest paid to financiers and other capital expenditures. Operating revenue can be compared year over0year to assess the health of a company and its operations. Total operating revenue provides a significant measure of a company s financial strength. Revenue is the total amount of income generated by the sale of goods or services related to the company s primary operations.

Operating income net earnings interest expense taxes. Operating income 116 million highlighted in blue below. Many small business owners make the mistake of seeing sales and revenues as synonymous which can lead to less effective planning and results tracking. Revenue also known as gross sales is often referred to as the top.

So while revenue shows the total amount of money coming in income shows the total amount coming in and out. Alone the 12 5 billion in revenue appears impressive at the onset but when factoring. The net operating income is the revenue generated from the daily operations of the business minus the operating expenses. Revenue is the total amount of sales generated by a company while income refers to the net profit earned minus expenses.

Formula for operating income.