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Other income and expense

The catch-all line below operating income for gains, losses and items that do not belong to the core business, such as currency moves and asset sales.

This line absorbs foreign exchange effects, gains on selling a building, insurance recoveries, and marks on investments. It is genuinely miscellaneous, which is why a quarter can beat on eps with no operational improvement at all.

When it is large relative to operating-income, read the footnotes. Recurring items hiding in "other" are a classic way to make the core look cleaner than it is.

Example: Northwind reports a $16M gain on the sale of an old plant inside other income. That is 13% of the year's $120M operating income and will not repeat, so a forecast built on this year's net income starts $16M too high.

Related: operating-income, one-time-charge, pre-tax-income

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