Saturday, March 15, 2008

How to Calculate Operating Income in a Merchandising Operation

Operating income in a merchandising company is the difference between gross margin and selling and administrative expenses.

Total Sales
- Cost of Good Sold (COGS)
=Gross Margin
- Selling and Administrative Expenses
= Operating Income

Financial Statements

1 comment:

Accounting education said...

for example
sale is $90
and cost of goods sold is $50
and then gross profit is
sale-cost of goods sold
$90-$50
=$40

Popular Accounting Problems

The information on this site is for informational purposes only and should not be used as a substitute for the professional advice of an accountant, tax advisor, attorney, or other professional.