what does income from operations mean 
income from operations ifo is also known as operating income or ebit income from operations is the profit realized from a business s own operations income from operations is generated from running the primary business and excludes sundry income from other sources for example this would exclude income generated from selling the property of a manufacturing company understanding income from operations ifo income from operations is the same as operating income by only looking at the profit generated in normal business operations it makes it easier to understand the potential future profitability of the company to calculate operating income start with revenue from operations then subtract the cost of goods sold and other operating expenses such as the cost of labor interest earned or paid should not be included taxes paid should not be deducted either do not include any gains or losses from investments or the purchase or sale of business assets income from operations only involves revenue and expenses involved in the day to day run of the business example of income from operationsfor example if a car company spends 100 000 building and selling cars then sells them for 110 000 it has 10 000 in income from operations because this is income generated only from normal operations an investor could assume that similar income will be generated every year as long as operations continue as another example if bob sells apples he could take the revenue he earned from selling the apples then subtract the costs incurred for care and picking of the apple trees while the apples were growing then subtract anything he paid to folks to care for pick or sell the apples the amount left over would be the operating income from bob s apple business 