What is an Operating Profit?

Operating profit accounting is the balance of the company's operating income after deducting operating costs, period expenses and various turnover taxes and surcharges. Operating income is the income obtained by the company's main commodity products (or labor services). Operating cost refers to the purchase cost and production cost of the company's merchandise product sales income, and the cost of labor services to provide services. Period expenses refer to a certain accounting period and should be included in the related expenses of the current period. Generally speaking, operating income is divided into main business income and subsidiary business income according to the importance of its operations. Corresponding to this, operating costs are also divided into main business costs and subsidiary business costs. The main business income of an industrial enterprise is the product sales revenue, and its corresponding cost is the cost of product sales, that is, the production cost of the commodity product; the income from the subsidiary business is other sales revenue, and its corresponding cost is other sales costs. ^[1]