Definition:

Other Operating Expense/(Income) refers to the costs or revenues that are not directly tied to the core business operations but are still part of the company's regular activities. These can include items such as restructuring costs, gains or losses from asset sales, or foreign exchange gains or losses.

Examples

Examples of Other Operating Expense/(Income) include restructuring charges, gains or losses from the sale of assets, impairment charges, and foreign exchange gains or losses.

Formula:

There is no specific formula for Other Operating Expense/(Income) as it is a category of various non-core operating items. It is typically reported as a line item on the income statement.

How to use the metric:

This metric is used to understand the impact of non-core activities on a company's profitability. Analysts and investors look at this line item to assess how much of the company's income or expenses are derived from activities outside its main business operations.

Limitations:

The main limitation of this metric is that it can include a wide range of items, making it difficult to compare across companies or industries. Additionally, it may contain one-time or non-recurring items, which can distort the understanding of a company's ongoing financial performance.

Applies to:

This metric applies to all industries, as most companies will have some form of other operating expenses or income that is not directly related to their core business operations.

Doesn't apply to:

There are no specific industries where this metric does not apply, but its relevance may vary. For example, industries with stable and predictable operations may have fewer items classified under this category, making it less significant.

Summary:

Other Operating Expense/(Income) captures non-core operating costs or revenues that are part of a company's regular activities but not directly tied to its main business operations. While it provides insight into the impact of these activities on profitability, it can include a wide range of items, making it challenging to compare across companies or industries.