Operating profit calculation

To calculate operating profit, you need to subtract the company's operating expenses from its revenue.

Here's an example:

Suppose a company has the following financials for the year:

Revenue: $100,000

Cost of goods sold (COGS): $60,000

Operating expenses: $20,000.

To calculate the operating profit, you would need to subtract the COGS and operating expenses from the revenue:

Operating profit = Revenue - COGS - Operating expenses                

                            = $100,000 - $60,000 - $20,000                

                            = $20,000.

Therefore, the company's operating profit for the year is $20,000. In summary, operating profit is the profit earned by a company from its core business operations. It is a useful measure of the company's operational performance and can be used to assess the company's profitability.

What is Finanshels?

What is Finanshels?Setting up a good small-business bookkeeping system can be an involved process, especially if you’re not an experienced bookkeeper. Rather than spending enormous time and effort on getting your books up and running, consider turning to Finanshels for help. We’ll set up your bookkeeping system to ensure that your business is starting off right – and we’ll save you a huge amount of stress.Want someone to help you organize your bookkeeping system? Try Finanshels