Aug 20, 2008 23:05
16 yrs ago
36 viewers *
English term

Operating Income vs Operating Profits

English Marketing Business/Commerce (general)
Is there an actual difference between the two terms.

Context (US English): "... operating profits went down 3%". No further explanation.

Responses

+2
23 mins
Selected

There is a difference

The income is ALL the money that comes in while the profits are ALL the money minus the operating expenses.

My thought.
Peer comment(s):

agree Deborah Workman : Yes, your profits are your "net (operating) income".
1 hr
agree d_vachliot (X)
7 hrs
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4 KudoZ points awarded for this answer. Comment: "Got it! Thank you all."
+1
23 mins

I don't think so.

Google provides a long list of definitions for both terms, but after looking through them, I came to the conclusion that there isn't really any difference.

These are for operating income:
An income statement subtotal that is variously called operating income or operating profit. Gross profit minus operating expenses. ...
www.americanbanker.com/glossary.html

The amount left over after subtracting the company's operating expenses from the gross profit

And here is one for operating profit:

is Gross Profit minus Operating Expenses.
www.ventureline.com/Glossary_O.asp
www.autoshopowner.com/glossary.html
Peer comment(s):

agree orientalhorizon : right, I'm in the financial area and know a little financial stuff.
2 hrs
Thank you.
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+2
1 hr

Of course

No need to waste time with examples. Income is all revenue coming in and profit is money left after taxes. In this case after operating expenses.
Peer comment(s):

agree Nuno Lima Netto : I agree here with danadiana. Operating income is the result of sales from which are deducted returns and taxes. It appears at the top of the Income Statement. Operating profits are the result of Operating Income less costs and operating expenses.
1 hr
agree d_vachliot (X)
6 hrs
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8 hrs

operating profits (Betriebsergebnis) i.e. of a bank: includes earnings from... contd. see below

includes earning from own account trading (which is termed Eigenhandel) as opposed to partial operating profit. i didnt dwelll on operating income as there have been submitted many explanations already.
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4702 days

No actual difference

Although dictionaries seem to show there is a difference, I don't think there is actually a difference in the use of the two terms, specially in financial statements. At the end, 'operating income' is also used to express the operating revenue minus operating expenses.
If you look at some financial statements publicly available on EDGAR, you confirm this.
For example, in AT&T INC.'s annual report for the year ended December 31, 2020, it says:

Operating revenues - 171,760
Operating expenses - 165,355
Operating income - 6,405

171,760 - 165,355 = 6,405

This is just one example, but I noticed the same thing in many other financial statements of American companies. In fact, it appears that 'operating income' is much more common than 'operating profit'.
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