Description: Net Operating Income (NOI) is a financial metric that represents the income generated by a company’s operations after deducting all associated operating expenses. This figure is crucial for assessing the profitability of a business’s core activities, as it excludes non-operating income and expenses, such as interest and gains or losses from investments. NOI is calculated by subtracting operating costs, which include salaries, rent, supplies, and other expenses related to the production and sale of goods or services, from the total income generated by these activities. This metric allows managers and financial analysts to better understand the operational efficiency of the company and its ability to generate profits from its main operations. Additionally, NOI is a key indicator for investors, as it provides a clear view of the company’s financial health and growth potential. In summary, Net Operating Income is an essential tool in business analysis, as it helps organizations make informed decisions about their operational and financial strategies.
