Net profits can be misleading

There are many types of profits that a company reports: operating profit, profit before exceptional items and taxes, net profits, etc. Each has its significance. Operating profit is calculated by using the company's revenue from operations and subtracting other operating expenses. It is also referred to as EBITDA (earnings before interest, taxes, depreciation and amortisation). No form of other income is taken into consideration for this metric. 'Profit before taxes and exceptional items' is a metric

This article was originally published on March 17, 2022.