PDSnet Glossary

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Definition

An income statement item usually immediately following the statement of turnover, but is not directly linked to it by calculation. Because finance costs are normally shown on the face of the income statement, they would have to be added back to the gross profit from the profit and loss account to arrive at operating income. They are then subtracted on the face of the income statement where shareholders can see their effect. As a private investor, you should be concerned to see that operating income is rising more quickly than the inflation rate.

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