Profitability
Operating income
What it is
The profit generated by the business itself, before interest on debt and taxes. It answers: "does this business, on its own, make money?"
How to read it
It's the most honest measure of operating performance, because it ignores how the company is financed. Two identical companies with different debt loads show the same operating income.
What it does not tell you
It excludes interest — yet for a heavily indebted company, debt costs can swallow this entire figure. Read it alongside net income.
Other measures — Profitability
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