#Operating Income

Operating income is the scorecard of a company’s core business, calculated by subtracting cost of goods sold and operating expenses from revenue. Yet it reflects not only efficiency but also executives’ vanity and shareholders’ mood swings. Ahead of quarterly announcements, cost cuts are made with the desperation of calm before a storm. A strong number invites applause, a weak one turns the finance department into an excuses factory. In the end, operating income is merely a script written by the company to stage its own show.