Which term is used to describe operating income minus interest expense?

The term that describes operating income minus interest expense is "Earnings Before Taxes." This financial metric is important because it reflects the earnings of a company before accounting for taxes, providing a clearer view of a company’s profitability from its operations and the impact of its financial leverage (interest expense).

By deducting interest expenses from operating income, Earnings Before Taxes highlights the amount of income available to cover tax obligations, giving investors and analysts insight into the company’s operational efficiency and financial structure. This measure does not include taxes, ensuring that comparisons can be made across different firms and industries, irrespective of the tax strategies they may employ.

The other terms have distinct meanings: Gross Profit focuses solely on the revenue remaining after the cost of goods sold, Net Income reflects total revenues minus all expenses, including taxes and interest, while Operating Income evaluates profitability from core operations before interest and taxes are considered. Each serves a different purpose in financial analysis, but for the specific calculation indicated in the question, Earnings Before Taxes is the correct term.