Asked by Cylas Kawika on Jul 19, 2024
Verified
Net operating income is income before interest and taxes.
Net Operating Income
Income derived from a company's everyday business operations, calculated by subtracting operating expenses from gross income.
Interest And Taxes
Financial charges on borrowed capital and compulsory contributions to state revenue, both of which affect a company's net income.
- Master the technique for calculating net operating income and appreciate its value in the realm of managerial accounting.
Verified Answer
ZJ
Zariah JordanJul 22, 2024
Final Answer :
True
Explanation :
Net operating income (NOI) is a measure used in real estate to calculate the profitability of income-generating properties, focusing on the property's revenues minus its operating expenses, not including taxes and interest payments. However, in a broader business context, the term "net operating income" might be less commonly used compared to EBIT (Earnings Before Interest and Taxes), which directly refers to income before interest and taxes for businesses in general.
Learning Objectives
- Master the technique for calculating net operating income and appreciate its value in the realm of managerial accounting.
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