Operating
Profit is exactly the same as Departmental Profit and is calculated by taking Gross Profit minus Departmental
Expenses. To make sense of this figure it is always expressed as a
percentage of Turnover when used for trending as it is the direction of
travel that is of most interest to you.
Example:
A) Operating Profit = R57,907 B) Departmental Turnover = R165,446 C) Operating Profit % = 35% (A ÷ B X 100)
Discussion:
Related Terminology:
The
Operating profit of the Service Department is also called many other
things such as, Direct Profit, and of course the
bottom line.