BUSINESS ADMINISTRATION
FINANCIAL MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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gross profit minus operating expenses
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sales revenue minus cost of goods sold
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earnings before depreciation and taxes
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sales revenue minus depreciation expense
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Detailed explanation-1: -Key Takeaways. Gross profit is the total revenue minus the expenses directly related to the production of goods for sale, called the cost of goods sold. Derived from gross profit, operating profit reflects the residual income that remains after accounting for all the costs of doing business.
Detailed explanation-2: -It is true that operating income is gross profit minus operating expenses. Operating income shows the remaining revenues earned once the costs of operations are subtracted.
Detailed explanation-3: -The operating profit (or operating income) can be found on the income statement, or calculated as revenue-cost of goods sold (COGS)-operating expenses-depreciation-amortization. Operating profit margin is calculated by dividing operating income by revenue.
Detailed explanation-4: -Net Income = Gross Profit-Operating Expenses-Other Business Expenses-Taxes-Interest on Debt + Other Income.