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What is operating income?

Operating income is also described as income from operations, operating earnings, or operating profit. Operating income will be shown as a subtotal on many corporations' income statements.

The operating income will appear after the corporation's operating expenses are subtracted from the operating revenues.

The operating revenues are often described as net sales, while the operating expenses will include the cost of goods sold, selling, general and administrative expenses (SG&A), and perhaps impairment charges. Some of the SG&A expenses may appear as separate amounts such as depreciation and amortization, and research and development.

The amount of operating income is shown before the provision for income tax and before investment income, interest expense, or other non-operating income or expense items.