The operating income in the income statement is calculated by the income obtained by the enterprise from the sale of goods, the provision of labor services and other activities within a certain accounting period. It mainly consists of two parts: main business income and other business income.
Main business income: refers to the income obtained by an enterprise from its main business in its normal business activities. For example, a company that manufactures mobile phones has its main business income from the sale of mobile phones.
Other business income: refers to the income obtained by the enterprise from non-core business activities. For example, a company that manufactures mobile phones, in addition to selling mobile phones, may also receive income from activities such as providing repair services and leasing part of the factory, which are other business income.
The calculation formula can be expressed as:
Operating income = main business income + other business income.
Operating income = main business income + other business income.
Or, if you consider the number of products sold (or served) and the unit price of the product (or the unit price of the service):
Operating income = product sales volume (or service volume) Product unit price (or service unit price).
Operating income = product sales volume (or service volume) Product unit price (or service unit price).
In the income statement, operating income is a very important indicator because it is directly related to the profitability and operating results of the enterprise. At the same time, operating income is also the basis for calculating indicators such as operating profit, total profit, and net profit.
It is important to note that operating income is different from non-operating income. Non-operating income refers to income that is not directly related to the production and operation process and should be included in the current profit, such as investment income and income from the disposal of fixed assets. The operating income refers to the income obtained by the enterprise in the normal business activities.