Operating Profit

The operating profit is the profit earned from a firm's normal core business operations.  It is also known as "earnings before interest and tax" (EBIT) or "operating income". Here the total operating expenses includes COGS+Operating Expenses+Depreciation & Amortization

EXAMPLE

TelMedia Company earns $50 million from its core advertisement operations, $2 million from its 10% stake in media corps. and $3.5 million from interest earned in its money market and bank accounts. Moreover, the company spends $12 million in production related costs.

Overall, the company's operating profit is $38 million. This is calculated as the $50 million in operating revenue million minus the $12 million in production costs. The other $2 million and $3.5 million in earnings are not included in operating income because they are investment income.