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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.

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