What Is Equal to Net Income Plus Operating Expenses?

What Is Equal to Net Income Plus Operating Expenses?

Net income plus operating expenses is equal to gross profit. The gross profit is what a company earns after it sells a product and pays all other costs associated with the production and sale of it.

Gross profit also is sometimes referred to as gross margin and gross income. The gross profit is important to understand when evaluating a company's success because it indicates how much money an organization gets to keep from what it makes. Some of the variables used to calculate gross profit include material costs, labor expenses, packaging and shipping costs, employee salaries and office or warehouse payments.