Net Income

CFA Level I
#1

I keep getting confused. Net Income can also be classified as operating income right? Any other terminology I should remember?

#2

No EBIT is the operating Income, NI includes both the operating as well as non-operating income.

#3

i agree with krisC

#4

NO…net income is not the same as operating income. Operating income is Revenue-COGS-SGA (or EBIT as we would call it).

#5

Ok. Thanks

#6

Net Income is the ‘bottom line’…

#7

EBIT is not technically the same as operating income…EBIT comes after you adjust OI for infrequent/unusual items (asset impairments etc)

#8

Nirjraina is correct. ALthough for simple manufacturing firms, it is the same. Now, remember that if the company is a financial firm, interest income is going to be part of operating income as well!

#9

nirjraina Wrote: ------------------------------------------------------- > EBIT is not technically the same as operating > income…EBIT comes after you adjust OI for > infrequent/unusual items (asset impairments etc) I would argue that EBIT should excluded any non operational income/loses, and thus, be the best estimate of operating income. If it were not, EBITDA would not be as important as it is.

#10

for test, i think it is fine to assume that EBIT = oprtg income