Income from operations

Income from operations is the profit generated by the operations of a business. This classification of income excludes gains and losses from the sale of assets, interest income, interest expense, and any other income not related to the core operations of the firm. Investors and creditors prefer to look at this number in order to gauge the ability of an organization to earn money on an ongoing basis.

For example, a company reports $1,000,000 of sales, $650,000 cost of goods sold, and $325,000 of operating expenses. Its income from operations is $25,000.

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The Income Statement