{
  "id": "operating-income",
  "version": "3ec51152a0ca",
  "status": "published",
  "name": "Operating Income Calculator",
  "question": "How much is my operating income?",
  "summary": "Computes operating income (income from operations): net revenue minus cost of sales and operating expenses, with gross profit and the operating margin.",
  "category": "finance",
  "subcategory": "business",
  "url": "https://www.acalculator.org/finance/operating-income-calculator",
  "markdown": "https://www.acalculator.org/finance/operating-income-calculator.md",
  "kind": "function",
  "method": "Net revenue = gross sales − returns, allowances and discounts. Gross profit = net revenue − cost of sales. Operating income = gross profit − operating expenses − depreciation and amortization. Operating margin = operating income ÷ net revenue × 100.",
  "assumptions": [
    "All amounts are for the same period, from one income statement.",
    "Operating expenses leave out interest and income tax, which come after operating income.",
    "Arithmetic is exact on the typed decimals; money shows to the cent and the margin to 2 decimals, halves up."
  ],
  "inputs": {
    "$schema": "https://json-schema.org/draft/2020-12/schema",
    "type": "object",
    "properties": {
      "sales": {
        "title": "Revenue (gross sales)",
        "description": "Total sales for the period, before returns, allowances and discounts.",
        "type": "number",
        "x-unit": "USD",
        "minimum": 0,
        "maximum": 1000000000000000
      },
      "ret": {
        "title": "Returns, allowances and discounts",
        "description": "Sales taken back or reduced. Leave empty if your revenue is already net.",
        "type": "number",
        "x-unit": "USD",
        "minimum": 0,
        "maximum": 1000000000000000
      },
      "cogs": {
        "title": "Cost of sales",
        "description": "What the goods or services sold cost to make or buy (cost of goods sold).",
        "type": "number",
        "x-unit": "USD",
        "minimum": 0,
        "maximum": 1000000000000000
      },
      "opex": {
        "title": "Operating expenses",
        "description": "Selling, general and administrative costs, such as rent, salaries, utilities, marketing and research. Not interest or income tax.",
        "type": "number",
        "x-unit": "USD",
        "minimum": 0,
        "maximum": 1000000000000000
      },
      "da": {
        "title": "Depreciation and amortization",
        "description": "The part of long-term assets’ cost charged to this period. Leave empty if it is already in operating expenses.",
        "type": "number",
        "x-unit": "USD",
        "minimum": 0,
        "maximum": 1000000000000000
      }
    }
  },
  "outputs": {
    "income": {
      "label": "Operating income",
      "description": "Gross profit − operating expenses − depreciation and amortization.",
      "format": "money"
    },
    "net": {
      "label": "Net revenue",
      "description": "Gross sales − returns, allowances and discounts.",
      "format": "money"
    },
    "gross": {
      "label": "Gross profit",
      "description": "Net revenue − cost of sales.",
      "format": "money"
    },
    "opex": {
      "label": "Total operating expenses",
      "description": "Operating expenses + depreciation and amortization.",
      "format": "money"
    },
    "margin": {
      "label": "Operating margin",
      "description": "Operating income ÷ net revenue × 100. Shown when net revenue is more than $0.",
      "format": "percent"
    }
  },
  "defaultAnswer": {
    "inputs": {
      "sales": 126000,
      "ret": 6000,
      "cogs": 60000,
      "opex": 13400,
      "da": 3600
    },
    "outputs": {
      "income": 43000,
      "net": 120000,
      "gross": 60000,
      "opex": 17000,
      "margin": 35.833333333333336
    },
    "text": "Revenue of $126,000.00 gives net revenue of $120,000.00, gross profit of $60,000.00 and operating income of $43,000.00."
  },
  "examples": [
    {
      "given": {
        "sales": 126000,
        "ret": 6000,
        "cogs": 60000,
        "opex": 13400,
        "da": 3600
      },
      "expect": {
        "income": 43000,
        "net": 120000,
        "gross": 60000,
        "opex": 17000,
        "margin": 35.833333333333336
      },
      "source": "U.S. Securities and Exchange Commission, Beginners’ Guide to Financial Statements (net revenues, gross profit, then operating expenses and depreciation deducted to give income from operations). https://www.sec.gov/about/reports-publications/beginners-guide-financial-statements; OpenStax, Principles of Finance, 5.1 The Income Statement (Clear Lake Sporting Goods: gross sales $126,000, returns $6,000, cost of goods sold $60,000, rent $5,500, utilities $2,500, salaries $5,400, depreciation $3,600, operating income $43,000). https://openstax.org/books/principles-finance/pages/5-1-the-income-statement: 126,000 − 6,000 = 120,000; 120,000 − 60,000 = 60,000; 60,000 − 13,400 − 3,600 = 43,000"
    },
    {
      "given": {
        "sales": 105000,
        "ret": 5000,
        "cogs": 50000,
        "opex": 9500,
        "da": 2500
      },
      "expect": {
        "income": 38000,
        "net": 100000,
        "gross": 50000,
        "opex": 12000,
        "margin": 38
      },
      "source": "OpenStax, Principles of Finance, 5.1 The Income Statement (Clear Lake Sporting Goods: gross sales $126,000, returns $6,000, cost of goods sold $60,000, rent $5,500, utilities $2,500, salaries $5,400, depreciation $3,600, operating income $43,000). https://openstax.org/books/principles-finance/pages/5-1-the-income-statement (prior year: gross sales $105,000, returns $5,000, cost of goods sold $50,000, depreciation $2,500, operating income $38,000)"
    },
    {
      "given": {
        "sales": 48250.75,
        "cogs": 31400.25,
        "opex": 19000.5
      },
      "expect": {
        "income": -2150,
        "net": 48250.75,
        "gross": 16850.5,
        "margin": -4.455889286695025
      },
      "source": "hand calculation in content.mdx: 48,250.75 − 31,400.25 − 19,000.50 = −2,150; −2,150 ÷ 48,250.75 × 100 = −4.46% (exact −860000/193003, Python Fraction)"
    },
    {
      "given": {
        "sales": 0,
        "cogs": 0,
        "opex": 25000
      },
      "expect": {
        "income": -25000,
        "net": 0,
        "gross": 0
      },
      "source": "hand calculation in content.mdx: 0 − 0 − 25,000 = −25,000; no margin on $0 of net revenue"
    }
  ],
  "sources": [
    "U.S. Securities and Exchange Commission, Beginners' Guide to Financial Statements: gross revenues less returns and allowances are net revenues; net revenues less the costs of sales are gross profit; gross profit less operating expenses and depreciation is income from operations, before interest and income tax. https://www.sec.gov/about/reports-publications/beginners-guide-financial-statements (retrieved 2026-10-19)",
    "OpenStax, Principles of Finance, 5.1 The Income Statement: the Clear Lake Sporting Goods income statement (gross sales $126,000 and $105,000, returns and allowances $6,000 and $5,000, cost of goods sold $60,000 and $50,000, depreciation $3,600 and $2,500, operating income $43,000 and $38,000, interest $2,000, income tax $6,000, net income $35,000). https://openstax.org/books/principles-finance/pages/5-1-the-income-statement (retrieved 2026-10-19)"
  ],
  "related": [
    "operating-margin",
    "ebitda",
    "gross-profit",
    "nopat"
  ],
  "changelog": []
}