Operating profit, also known as operating income, is a financial metric that shows how much a company earns from its core business operations before deducting interest and taxes. It is calculated by subtracting operating expenses—such as wages, rent, and cost of goods sold—from total revenue. Operating profit reflects a company’s ability to manage its day-to-day expenses efficiently and generate earnings from regular business activities. It does not include income from investments or one-time transactions, making it a key indicator of operational performance. Investors and analysts often use operating profit to assess a company’s profitability and compare it with industry peers.