How do I find my total operating revenue on an Income Statement?
Solution
The total revenue of an organisation could braodly be classified into operating revenue and non operating revenue. Operating revenue is that portion in the income statement which reflects the revenue earned by the organisations from its regular business operations for conducting which the organisation has been incorporated. Non operating revenues are the ones which the company earned from other sources like the revenue earned from the sell of old assets. Which revenue will be operating and which one is non operating entirely depends upon the regular business activities for which the business organisation has been formed.
For example in the income statement of a manufacturing organisation of a particular product, the revenue earned by selling the product is Operating Revenue, but if there is any income that has been earned by the same organisation in the form of interest on any investment made by it, that interest income or revenue will be classified as the Non operating revenue.
On the other hand the interest income is a operating revenue for an organisation which runs its business as one providing financial services to the community like lending money to its clients.
To find total operating revenue in the income statement one can either just add up the revenues earned by the organisation from its regular and day to day business operations OR one can find the non operating revenues (that is the revenue earned by the organisations from other sources, not related to its main business operations) and then can subtract the same from the total revenue as given in the income statement.
Another important point regarding the operating revenue, is that, in the Income statement the operating expenses are subtracted from the Operating revenue to give the operating profit. The non operating revenues are shown after the operating profit under the heading \"other Income and Expenses\" to find the Net Income earned by the organisation during a given time period.
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How do I find my total operating revenue on an Income Statement-Soluti.docx
1. How do I find my total operating revenue on an Income Statement?
Solution
The total revenue of an organisation could braodly be classified into operating revenue and non
operating revenue. Operating revenue is that portion in the income statement which reflects the
revenue earned by the organisations from its regular business operations for conducting which
the organisation has been incorporated. Non operating revenues are the ones which the company
earned from other sources like the revenue earned from the sell of old assets. Which revenue will
be operating and which one is non operating entirely depends upon the regular business activities
for which the business organisation has been formed.
For example in the income statement of a manufacturing organisation of a particular product, the
revenue earned by selling the product is Operating Revenue, but if there is any income that has
been earned by the same organisation in the form of interest on any investment made by it, that
interest income or revenue will be classified as the Non operating revenue.
On the other hand the interest income is a operating revenue for an organisation which runs its
business as one providing financial services to the community like lending money to its clients.
To find total operating revenue in the income statement one can either just add up the revenues
earned by the organisation from its regular and day to day business operations OR one can find
the non operating revenues (that is the revenue earned by the organisations from other sources,
not related to its main business operations) and then can subtract the same from the total revenue
as given in the income statement.
Another important point regarding the operating revenue, is that, in the Income statement the
operating expenses are subtracted from the Operating revenue to give the operating profit. The
non operating revenues are shown after the operating profit under the heading "other Income
and Expenses" to find the Net Income earned by the organisation during a given time period.
