Скачать или смотреть Operating Earnings Explained - What Is Operating Profit? | How to Calculate Operating Margin

In this new edition of The Income Statement Explained we'll be talking about operating profit, as well as the operating profit ratio calculation. This is derived from operating expenses, which were covered in the previous video linked below.

Previous video (Cost of Operations Explained):    • Operating Expenses Explained - What Does C...  

Operating Profits breaks down into the following equation:
Gross Profit - Operating Expenses = Operating Earnings

Operating Earnings represent how much is left after discounting both cost of goods sold (or cost of revenue) and operating expenses from the revenue.

Operating Margins can be calculated the following way:
Operating Profit / Revenue = Operating Margin

This represents what percentage of revenue is being turned into operating profit after discounting the cost of goods sold and operating expenses such as selling, general, and administrative expenses as well as research & development.

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