what is operating revenue 
operating revenue is the revenue that a company generates from its primary business activities for example a retailer produces its operating revenue through merchandise sales a physician derives their operating revenue from the medical services that they provide what constitutes operating revenue varies based on the business or the industry investopedia theresa chiechiunderstanding operating revenuedistinguishing operating revenue from total revenue is important because it provides valuable information about the productivity and profitability of a company s primary business operations despite the fact that operating revenue is recorded separately on financial statements some firms may attempt to mask decreases in operating revenue by combining it with non operating revenue understanding and identifying the sources of revenue is helpful in assessing the health of a firm and its operations operating revenue vs non operating revenuenon operating revenue is revenue generated by activities outside of a company s primary operations this type of revenue tends to be infrequent and oftentimes unusual examples of non operating income include interest income gains from the sale of assets lawsuit proceeds and revenues from other sources not connected to operations for example a private university may classify tuition received as operating revenue whereas gifts from alumni are considered non operating revenue because they are not expected nor are they part of ordinary university operations in this example the university s income statement lists operating revenue and profit from operations first then it posts non operating revenue and profit such as revenue received from gifts and legacy donations this presentation of information informs those reviewing the company s financial records that the gift is not an ordinary part of the university s business it is important to distinguish the difference because non operating revenue can change drastically from year to year special considerationsnon operating revenue and income do not produce cash inflows that are consistent from one year to the next which is another reason why the activity is separately identified in the income statement for a company to fund company operations the business must generate operating revenue firms that drive operating revenue can fund the business regularly without the need to seek additional financing and these companies can operate with a lower cash balance for example a company may sell a fixed asset such as a building in the current year if the building is sold at a gain the gain will be treated as non operating revenue in the year it was sold this revenue is not expected as a normal course of doing business and the one time revenue should not be used to assess the success of the company s primary operations year over year for a successful company operating revenue and income are the primary sources of earnings per share eps this ratio is a key statistic for evaluating a firm s stock price eps is defined as earnings available to common shareholders divided by common shares outstanding a well managed business can grow operating revenue and income by finding more customers and moving into new markets that generate higher earnings as eps increases many investors and analysts consider the stock to be more valuable and the stock price increases 