Income from Continuing Operations

Operating income is simply sales less cost of goods sold, less operating expenses.


Because it includes noncash amortizations, it is a "fully loaded" view of operating performance in the business. (Depreciation and amortization expenses are usually broken out on the earnings statement, but may also be buried in a consolidated SG&A, or other operating expense line.)


If you closely observe the effects of amortizations, special write-downs, and accounting changes, you can better understand operating income and operating income trends.



Income from continuing operations tell shareholders, in total, what their investment is returning, after everyone, including Uncle Sam and his brethren, is paid.


Income from continuing operations is a good indicator of total business performance, but be aware of truly extraordinary events driving expenses or income.