What is the definition of an Operating Income?

Operating Income is an accounting term which refers to the profit a company earns on its general business operations. This does not include expenditure or payments on investments, taxation, interest, legal fees etc.

Operating Income is simply Revenue minus Operating Expenses and Depreciation / Amortization.

How to calculate Operating Income 

1. Operating income = Total Revenue – Direct Costs – Indirect Costs. OR.
2. Operating income = Gross Profit – Operating Expenses – Depreciation – Amortization. OR.
3. Operating income = Net Earnings + Interest Expense + Taxes. Sample Calculation.