Net Operating Income (NOI)
Investor term:
NOI
Definition:
Net operating income (NOI) is a measure of the profitability of a business before interest and taxes are taken into account. It is calculated by subtracting operating expenses from operating revenue.
Formula:
NOI = Operating Revenue - Operating Expenses
Example:
Here are some examples of operating expenses:
Cost of goods sold: Cost of goods sold is the cost of the products or services that a business sells.
Selling, general, and administrative expenses: Selling, general, and administrative expenses are the expenses that a business incurs in order to sell its products or services and to manage its operations.
Depreciation and amortization: Depreciation and amortization are non-cash expenses that are used to account for the wear and tear of a business's assets.