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Business Management Professor Soo Young Kwon’s Influential Contributions to Maeil Business​​​
Hits : 40 Registration Date : 2026-02-27 Author : Administrator

IFRS 18 to Be Introduced Next Year… Scope of Operating Profit to Expand

 

Operating profit refers to the profit generated from a company’s core business activities. It is calculated by subtracting the cost of goods sold and operating expenses (such as selling and administrative expenses) from total revenue. Items such as interest expenses, taxes, and one-time gains or losses are excluded.

 

Operating profit is considered important because it reflects core business performance by excluding non-recurring or non-operational factors. It enables management to identify areas for cost reduction and develop pricing strategies. Investors use it to assess a company’s market position, while creditors evaluate repayment capacity based on it. Because operating profit indicates the sustainability of earnings from a company’s primary operations, it is often used as a key investment metric, sometimes even more than net income. Analysts may further adjust certain components of operating profit when assessing a company’s overall value.

 

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