🏭 Operating Income

What it is: Also called EBIT (Earnings Before Interest and Taxes) or Operating Profit. This is your profit from core business operations after all operating expenses — but before accounting for how the business is financed (interest) or taxed.

Operating Income = Gross Profit − Operating Expenses (SG&A, R&D, D&A, etc.)

Where to find it: On your P&L, it typically appears as a subtotal after all operating expenses and before "Other Income/Expense" items like interest. It may be labeled Operating Income, Income from Operations, or EBIT.

Example: Gross Profit $650K − Salaries $300K − Rent $50K − Marketing $80K − D&A $22K = Operating Income $198K