Multiple choice

Operating Profit is also known as

  1. Gross Profit

  2. Earnings Before Interest and Tax

  3. Net Profit

  4. None of these
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

 Operating Profit is also known as, earnings before interst and tax. It is the excess of gross profit over operating expenses. It means that all the expenses which are indirect ( office, administrative, selling and distribution ) are deducted from the gross profit. The operating pfofit is calculated. From this operating profit , we have to deduct interest payments and taxes, to calculate the net profit. So operating profit is also known as Earnings before Interest and Tax.    

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