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Investments glossary

Operating Earnings

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Operating earnings are the profit earned after subtracting from revenues only those expenses that are directly associated with operating the business, such as the cost of goods sold (COGS), general and administration (G&A), selling and marketing, research and development, depreciation, and other operating costs. Operating earnings are an important measure of profitability. Because this metric excludes non-operating expenses, such as interest and taxes, it enables an assessment of the company’s core business profitability.


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