Income Earned Minus The Expenses

A positive number indicates that you make more than you spend and therefore are able to save money.

Income earned minus the expenses. If we take gross profit minus operating expenses it will give us the operating income of a company. It means what the company pays for an operational expense salary for the employee taxes on income interest etc. It is the actual amount the company earned over a period of time. Operating income is the income earned on a company s sales of goods and services.

It does not include one time events not related to normal operations such as the sale of a piece of unused property. Operating income is sometimes referred to as earnings before interests and taxes or ebit. The difference between earned income and gross income is an important one come tax time. Earned income as a self employed business owner.

As well as business income minus expenses if the person is self employed. In short net income is total revenue minus total expense which can be written as where revenue. If you work for yourself and by yourself in a small business you must file a business tax return usually on schedule c. Operating income refers to the normal income a company earns minus its operating expenses.