Records how much profit has been made in total from the trading activities of the business before any account is taken of how the business isfinanced.
Operating profit, also known as EBIT (Earnings Before Interest and Taxes), is a measure of a company's profitability that ignores non-operating expenses and taxes. It's calculated by taking a company's revenue, subtracting the costs associated with running the business, and ignoring interest and taxes. Operating profit shows how well a company is performing based on its core business operations. It doesn't include things like investment income or one-timeevents.
To calculate operating profit, you take a company's revenue and subtract its cost of goods sold, selling, general and administrative expenses, and depreciation and amortization. The resulting number is the operating profit. It's an important metric for evaluating a company's financial health andperformance.
