The remaining profit after subtracting both the cost of goods sold and operating expenses from sales is known as what?

The remaining profit after subtracting both the cost of goods sold and operating expenses from sales is referred to as operating income. Operating income is a key measure of a company's profitability from its core business operations, excluding any non-operational income or expenses such as interest or taxes.

To break this down:

• Sales revenue is generated from selling goods or services, and then the cost of goods sold (COGS) is deducted to determine the gross profit.

• From gross profit, operating expenses (which include selling, general and administrative expenses) are then subtracted. The residual amount after these deductions is the operating income, reflecting the earnings generated specifically from operational activities.

This distinction is important in financial analysis, as operating income provides insight into how well the company is performing in its primary business activities without the influence of financial leverage or tax strategies.

Gross profit, while related, only considers the direct costs of producing goods sold and does not account for operating expenses. Net income goes further by including other income sources, expenses, tax obligations, and interest. Earnings before taxes, as the name implies, includes all income and expenses except for tax-related costs. Each of these metrics serves a different purpose in evaluating a company's financial performance.