BEC Help – it's basic but…

  • Creator
    Topic
  • #180806
    Anonymous
    Inactive

    please help me review basic wording with me.

    Sales

    – COGS

    = Gross Profit

    – Operating Expenses

    = EBIT, Operating Profit, or Operating Income

    – Interest Revenue or Expense

    = Income before income tax or EBT

    – Income Tax

    = Net Income

    First of all, do I understand those correctly?

    Second of all, what is Net Operating Income and where should it be located above?

    I struggle with a ratio problem (ROI) from Wiley testbank.

    Well, it says ROI = Net Operating Income / Average Invested Capital.

    I assume ROI = Net Income / Average Invested Capital.

    some say NOI is like EBIT and some say like Net Income…

    at last, so ROI =…..I think I am confused.. please help, many thanx!!!

Viewing 8 replies - 1 through 8 (of 8 total)
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  • #454920
    futureCPA12
    Participant

    Ok so I don't want to give you the wrong answer, but I believe net operating income is the same as net income. The “net” tells you its net of all expenses. Thats just my two cents.

    The formula above looks correct to me. Just make sure you know the difference between absorption and variable costing.

    #455055
    futureCPA12
    Participant

    Ok so I don't want to give you the wrong answer, but I believe net operating income is the same as net income. The “net” tells you its net of all expenses. Thats just my two cents.

    The formula above looks correct to me. Just make sure you know the difference between absorption and variable costing.

    #454922
    Anonymous
    Inactive

    Net Income and Net Operating Income are not the same thing.

    Operating income shows a company’s profit from ordinary operations before taxes and interest, so it is the line in your formula that you have “EBIT, Operating Profit, or Operating Income” written.

    #455057
    Anonymous
    Inactive

    Net Income and Net Operating Income are not the same thing.

    Operating income shows a company’s profit from ordinary operations before taxes and interest, so it is the line in your formula that you have “EBIT, Operating Profit, or Operating Income” written.

    #454924
    futureCPA12
    Participant

    Oh yeah duh. I don't know why I didn't see that. Its as on the income statement. You have income from operating activities. That is the same as net operating income. Then you'd have a section for “other income and expenses” and that would give you the net income.

    #455059
    futureCPA12
    Participant

    Oh yeah duh. I don't know why I didn't see that. Its as on the income statement. You have income from operating activities. That is the same as net operating income. Then you'd have a section for “other income and expenses” and that would give you the net income.

    #454926
    nishvik
    Participant

    @cpa_punk though your query is basic,i know it happens when you practice a lot and at some point you have doubt becoz after solving tedious calculations you tend to make simple calculations look tough :-}

    Ok so i just checked the formula in both Wiley textbook and my Becker book it says ROI/ROA( Return on Investment/Asset)

    Formula is Net Income after interest and taxes/Average Invested Capital.

    So Net operating income is the income you derive from your main operations so after selling your goods/services what is left after you subtract cost of making those goods,rent,electricity,water.

    Net Income comes after that which is really what you have in the end after interest and tax expenses.

    I hope that helps 🙂

    If I am wrong some where guys please pinpoint.

    FAR- 79 -->Becker self study, Final review & Flashcards
    REG -72-->Becker ,76-->Becker plus Wiley test bank
    AUD- 73 Becker,72-->Becker+Wiley,69-->Added ninja notes,89 --> Added Gleim review
    BEC- 84 Becker plus Wiley Test bank

    I am Done !!!!

    #455061
    nishvik
    Participant

    @cpa_punk though your query is basic,i know it happens when you practice a lot and at some point you have doubt becoz after solving tedious calculations you tend to make simple calculations look tough :-}

    Ok so i just checked the formula in both Wiley textbook and my Becker book it says ROI/ROA( Return on Investment/Asset)

    Formula is Net Income after interest and taxes/Average Invested Capital.

    So Net operating income is the income you derive from your main operations so after selling your goods/services what is left after you subtract cost of making those goods,rent,electricity,water.

    Net Income comes after that which is really what you have in the end after interest and tax expenses.

    I hope that helps 🙂

    If I am wrong some where guys please pinpoint.

    FAR- 79 -->Becker self study, Final review & Flashcards
    REG -72-->Becker ,76-->Becker plus Wiley test bank
    AUD- 73 Becker,72-->Becker+Wiley,69-->Added ninja notes,89 --> Added Gleim review
    BEC- 84 Becker plus Wiley Test bank

    I am Done !!!!

Viewing 8 replies - 1 through 8 (of 8 total)
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