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Net operating income (must be a positive number, otherwise would be net operating loss) is the amount after expenses have been deducted out of sales, BUT before INTEREST and INCOME TAXES have been deducted (also called EBIT: Earning before Interest and Taxes). Therefore, the difference is that Net operating income includes interest and income tax expenses, where as Net Income does not include it.

Sales

(-)CGS

Gross profit

(-)Operating expenses/depreciation

Net operating Income (EBIT)

(-)Interest and income taxes

Net Income

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15y ago

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