Acevil on 14 May 2014
| binary solo said: I hate this accounting shit. So operating income means positive cashflow for the year, but they made a big loss because other stuff strips out that positive cashflow or something? |
Given I am really trying to simplify this to the best of my ability. Operating Income means in the simplist sense, the income from the company operating day to day.
For the simplist version it is (Sales) Revenue - Cost of Product (Cost of Goods Sold) = Gross Profit - Operating Expense = Operating Income
However a company isn't just something that operates to continue to exist. It has taxes, It has other expenses and other income sources and they do add up and they add up dramatically.
(I think this is a good way to explain it, Kowen, wanna take a better shot at it?)
