Operating Profit


Operating profit is the total earnings from your core business (over any period) before making deductions for interest, expenses, and tax payments. It does not include any profits made from a business' non-core areas. Operating profit is used to understand how well a company allocates its resources. 

What is a good operating profit for a startup?

First of all, if your company is generating a profit, that’s an accomplishment in and of itself. However, there isn’t a definitive answer to the question “what is a good profit for my company?” What you should ask yourself instead is, “what’s good profit in my industry?” and use that as your benchmark. 

Is 10% a good operating profit margin?

As mentioned, good profit margins vary by industry, but as a general rule of thumb, 10% operating profit margin is considered average. —

Is operating profit the same as turnover?

Turnover and profit represent a company's revenue, but they calculate that income using different inputs. Turnover — also called net sales — is the pure income from sales a company makes, while profit is the total turnover remaining after the organization accounts for all expenses, both variable and fixed.

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