How is Operational Profit % calculated?

The Operational Profit is the amount of core revenue left after all the operational direct, indirect and miscellaneous costs are taken out and is a key indicator of the health of the Income Statement.  The Operational Profit % is calculated as follows:

• Operational Profit [core revenue less direct costs less indirect costs, add miscellaneous revenue, less miscellaneous expenses*] / Core Operational Revenue

The Operational Profit % shows the percentage of revenue that is profit, or how many cents remain from each dollar of revenue.

The 4 most powerful levers to impact Operational Profit are Price, Volume, Direct Costs, and Indirect Costs.

*Interest is excluded from this calculation.  Depreciation is included in the calculation.