Operating profit is a measure of profitability that deducts cost of sales and all expenses incurred in operating the business from net sales. This calculation provides insight into the profitability of the core operations of a business, excluding any financing or investment activities.

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Operating Profit Is

Question 29

Multiple Choice

Operating profit is:

A) A measure of profitability after deducting cost of sales from net sales.
B) A measure of profitability after deducting cost of sales and all expenses incurred in operating the business from net sales.
C) A measure of liquidity after deducting cost of sales from net sales.
D) The equivalent of net sales.

Correct Answer: