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Respected sir,
First question : considering the chapter interpretation of financial statements operating profit margin is same as net profit margin wherein pbit is used?Second question: while calculating operating profit margin or interest cover…should we use solely operating profit or pbit as in before interest and tax but including investment income(or other non operating income)
Operating profit margin is the same as the net profit margin (the net profit being the profit before interest and tax).
Include all income in calculating the operating profit/net profit.
Thanks sir…but if we use operating profit shouldn’t we exclude non operating income(like dividend received or investment income)? As operating is calculated after which we record other income and finance charge …so shouldn’t we use operating profit only
Considering your reply my interpretation is for calculating operating profit /margin net profit margin/interest cover we use operating profit + other income.
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