Fundamental Glossary / Profitability Metrics
Operating Profit
Profit from the core business after operating expenses, including depreciation, and before interest and tax.
Formula
Gross profit - operating expenses. Analysts sometimes say EBIT when the two match.
What it means
Operating profit is the result management can influence by selling, pricing, and controlling costs, before the treasurer and the tax authority take their turns.
On Indian statements, look for profit from operations, and check whether other income has been included in the headline investors are shown.
How to read it
Operating profit should grow at least as fast as sales in a business with fixed costs, once sales pass the break-even point. If it lags sales for several periods, operating costs are leaking.
What to watch
Restructuring charges, stock-based pay, and lease accounting can sit inside or outside operating profit depending on the policy. Read the reconciliation to reported EBIT.
This note explains the term. It is not a research recommendation, a target price, or a comment on any security. Ratios and regulatory thresholds change; use the latest filing or circular for a live figure.