- CFA Exams
- CFA Level I Exam
- Study Session 7. Financial Reporting and Analysis (2)
- Reading 21. Understanding Income Statements
- Subject 8. Analysis of the Income Statement
CFA Practice Question
Operating profit is equal to ______.
A. net sales minus cost of goods sold
B. gross profit minus selling and administrative expenses
C. earnings before income taxes
Explanation: Operating profit is equal to gross profit minus selling and administrative expenses.
User Contributed Comments 5
| User | Comment |
|---|---|
| adansaenz | isnt goss profit equal to revenues - cogs - S&A expenses? |
| enum | No. Gross profit = revenue - COGS |
| xboxt | Don't you have to minus depreciation and amortization apart from SG&A? |
| dservan1 | i agree xboxt- what about depreciation ? |
| RahuLmal | What about depreciation, amortization, research expenses ? |