Operating vs Non-Operating Analysis Template
Separate operating results from non-operating items. Identify impact of one-time, unusual, or non-recurring items on reported earnings.
How to use this template
Define operating activities
Identify which items are core operating results: sales, cost of goods sold, operating expenses directly supporting revenue generation.
Identify non-operating items
List non-operating items: interest expense, investment income, gains/losses on asset sales, one-time charges, acquisition costs, restructuring.
Calculate operating income
Compute operating income before financing and investment decisions. Compare to reported net income.
Quantify impact of non-operating items
Calculate total impact of non-operating items on net income. Express as percentage of operating income and absolute amount.
Analyze trends and sustainability
Assess whether non-operating items are recurring or one-time. Discuss sustainability of operating income independent of one-time items.
Why use this template
- Shows true operating performance independent of financing and investment decisions
- Identifies quality and sustainability of earnings
- Highlights one-time items that don't recur
- Enables better comparison of performance to prior periods and competitors
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