Income From Operations - IFO


DEFINITION of 'Income From Operations - IFO'

The profit realized from a business' own operations. Income from operations is generated from running the primary business and excludes income from other sources. For example, this would exclude income generated from selling the property of a manufacturing company.

BREAKING DOWN 'Income From Operations - IFO'

This is the same as operating income. By only looking at the profit generated in normal business operations it makes it easier to understand the potential future profitability of the company. For example if a car company spends $100,000 building and selling cars then sells them for $110,000, it has $10,000 income from operation. Because this is income generated only from normal operations, an investor could assume that similar income will be generated every year as long as operations continue.

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  1. Can a company's working capital turnover ratio be negative?

    A company's working capital turnover ratio can be negative when a company's current liabilities exceed its current assets. ... Read Full Answer >>
  2. Does working capital measure liquidity?

    Working capital is a commonly used metric, not only for a company’s liquidity but also for its operational efficiency and ... Read Full Answer >>
  3. How do I read and analyze an income statement?

    The income statement, also known as the profit and loss (P&L) statement, is the financial statement that depicts the ... Read Full Answer >>
  4. Do dividends affect working capital?

    Regardless of whether cash dividends are paid or accrued, a company's working capital is reduced. When cash dividends are ... Read Full Answer >>
  5. Do prepayments provide working capital?

    Prepayments, or prepaid expenses, are typically included in the current assets on a company's balance sheet, as they represent ... Read Full Answer >>
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    A company's working capital ratio can be too high in the sense that an excessively high ratio is generally considered an ... Read Full Answer >>

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