operating profit

Meanings

• noun

  The part of a company's profit which remains after deducting operating expenses, but before income tax and interest and other non-operating items.

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Variants

List of all variants of operating profit that leads to same result
operating , operate , operated , operates , operating system , operating systems , operating room , operating table , operating theatre , self-operating , standard operating procedure , standard operating procedures , standing operating procedure

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Etymology

origin and the way in which meanings have changed throughout history.

Operating profit is a financial metric that represents the earnings a company generates from its core business activities, before accounting for taxes, interest, and other non-operating items.

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Trivia

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1. Operating profit is also known as earnings before interest and taxes (EBIT).

2. The operating profit margin is calculated by dividing operating profit by revenue, providing insight into a company's profitability relative to its sales.

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Related Concepts

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1. Net Income: Operating profit is a component of net income, which represents the total earnings of a company after all expenses have been deducted.

2. EBITDA: Operating profit is closely related to EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization), which is another financial metric used to evaluate a company's profitability.

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Culture

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Operating profit is a key financial indicator used by investors and analysts to assess a company's profitability and efficiency.

How to Memorize "operating profit"

1. visualize
   

   - To memorize operating profit, imagine a company generating revenue from its core business activities, then subtracting the costs of producing those revenues to arrive at the operating profit.

2. associate
   

   - Associate operating profit with the core business activities of a company, as it represents the earnings generated from those activities before accounting for other expenses.

3. mnemonics
   

   - Use the mnemonic 'Operating = Revenue - Costs' to remember that operating profit is the difference between a company's revenue and its operating expenses.

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