Operating revenue is the income earned from engaging in the main business. Refers to a certain period of time, the commercial enterprise sales of goods or the provision of labor services to obtain monetary income.
Profit is the operating results of a business in a certain accounting period, divided into operating profit, gross profit and net profit. Formula:
Operating Profit = Operating Income - Operating Costs - Operating Taxes - Period Expenses - Asset Impairment Losses + Net Gain on Changes in Fair Value + Net Gain on Investments
Operating income is the main source of profit.
The significance of operating income to the enterprise
1. Operating income is a source of funds for enterprises to compensate for the consumption of production and operation. The realization of operating income is related to the enterprise in the normal conduct of production activities, strengthen the management of operating income, can make the enterprise's various expenses to be reasonable compensation, is conducive to the smooth progress of reproduction activities.
2. Operating income is the main business results, is an important guarantee of profit. Strengthen the management of operating income is one of the important means of realizing the financial objectives of enterprises.
3. Operating income is an important part of the enterprise cash inflow. Strengthening the management of operating income can prompt enterprises to study and understand the changes in market demand in depth, in order to make the correct business decisions, to avoid blind production, which can improve the quality of enterprises, enhance the competitiveness of enterprises.