Table of Contents
What is Operating revenue?
What is Operating revenue?
Operating revenue – Operating revenue refers to the revenue generated by a Business enterprise from its primary business activities.
Or
Operating revenue refers to the revenue generated by a company from its primary business activities.
Or
Operating revenue refers to the revenue earned by a Business enterprise from the Core Activities of the business enterprise.
For example, a Manufacture, a wholesaler, a retailer produces its operating revenue through the sale of goods or merchandise;
In the case of a physician, the operating revenue is generated by providing medical services.
In the case of a Lawyer, the operating revenue is generated by providing legal services.
In the case of a CFA, the operating revenue is generated by providing financial advisers, sales, and client services.
A Tax consultant derives their operating revenue from the Tax services that they provide.
Key Points of Operating revenue –
- Operating Revenues are the regular income for any business enterprise.
- Operating Revenues earned from the Core Activities of the business enterprise.
- Revenue generated from Operating Activities of the business enterprise is called Operating Revenues.
- Operating activities are the principal revenue-generating activities of the enterprise.
- Operating Revenue is the lifeblood of any business enterprise.
What is Operating Income?
Excess of operating revenue over operating Expenses is called operating income.
Earnings before interest and tax(EBIT), also known as operating income.
Operating income= Net Sales – (Cost of revenue From operation-Operating Expenses)
Or
Operating income= Gross Income-Operating Expenses
Gross Income=Net Sales – Cost of revenue From operation
Or
Operating income = Total Operating Revenue – Direct Costs – Indirect Costs
What is Non-Operating Income?
Non–operating income is the portion of an organization’s income that is derived from activities not related to its core business operations.
Non-Operating Incomes = Interest Received on Investment + Profit on sale of Non-Current Assets+ Dividend received+Rent Received