Non-Operating Revenue
Content
Definition
Non-Operating Revenue is income derived from activities not related to a company`s primary business operations, such as investments or asset sales.
Usage and Context
Non-operating revenue provides additional income streams that do not involve the company’s core business activities, influencing overall profitability.
Frequently asked questions
- What is an example of a non-operating revenue? An example of non-operating revenue is the income earned from investments, such as capital gains from the stock market. For instance, if a retail store invests $10,000 in stocks and earns a 5% return, the $500 gain would be considered non-operating revenue.
- What is the difference between operating and non-operating revenues? Operating revenues are generated from a company`s core business activities, such as sales of products or services. Non-operating revenues are generated from activities not related to the core operations, such as investments, asset sales, or interest income.
- What is a non-operating expense example? An example of a non-operating expense is interest expense on a company`s debt. Other examples include losses from the sale of assets and restructuring costs.
Benefits
Non-operating revenue can enhance overall profitability, provide financial stability, and offer additional income sources without relying on core business operations.
Conclusion
Non-operating revenue is a valuable component of a company`s financial health, providing additional income from activities outside the core business operations and contributing to overall profitability.
