operating income

(redirected from Operating Incomes)

Operating Income

A company's income from the goods and services it provides, less its operating expenses and depreciation. The operating income does not include losses from interest payments or income tax. For example, a widget manufacturer earns $1,000,000 in gross revenue from the sale of widgets. The widgets cost $200,000 to make and his administrative and payroll expenses total $250,000. He also must subtract $50,000 in depreciation on his widget manufacturing equipment. His operating income is stated as: $1,000,000 - $200,000 - $250,000 - $50,000 = $500,000. Operating income is closely related to earnings before interest and taxes (EBIT), but EBIT includes nonoperating income, which is usually (but not always) significantly less than operating income. See also: Net income.

operating income

The excess of revenues over expenses derived from normal business operations. Operating income, representing income from ordinary business activities, excludes expenses, such as interest and taxes. Unusual nonrecurring items, such as gains from selling a subsidiary or losses from closing a plant, are not included in the calculation of operating income. Also called earnings before interest and taxes, operating profit. Compare operating loss. See also operating revenue.

operating income

See net operating income.

References in periodicals archive ?
This method requires a comparison of the operating income that results from the consideration charged in the controlled transfer with the operating incomes of similar, uncontrolled parties.
In general, CPI is a range of hypothetical operating incomes that a "tested party" would have earned if objective measures of profitability - known as profit level indicators (PLIs) - had been equivalent to those of uncontrolled taxpayers performing similar functions.
If the pricing method results in operating incomes outside of CPI, the transfer pricing method is invalid and must be redetermined - most likely under the CPI transfer price method.
Tight management of costs and expenses kept third quarter and year-to-date September operating incomes of P628 million ($12 million) and P3.
Hong Kong, Vietnam and North China continued modest increases in volumes and operating income.
8 billion ($226 million), up by 15% from last year, while operating income totaled P2.
The economic theory underlying this procedure is that where there is a convergence of the constructive operating incomes (i.
The constructive operating incomes derived from four of the potential comparables, however, are clustered together.
This analysis effectively attributes to taxpayers engaged in related-party transactions an amount of operating income somewhere within a range -- referred to as the "comparable profit interval" (CPI) -- that the taxpayers would have earned had their performance been equivalent to comparable businesses operating at arm's length.
San Miguel's food and agribusiness operations, except feeds, performed better than 1997 in terms of volume, revenues and operating incomes.
For example, the gains in operating income were higher for San Miguel Brewing Philippines with an 83% growth; LTDI with 67%; and San Miguel Food Group with 90%.
Consequently, operating income increased by 67% to P2.