rekstrarhagnaðurinn

Rekstrarhagnaðurinn is the Icelandic term for operating profit, often equated with EBIT (earnings before interest and taxes). It measures profitability from a company’s ordinary business activities and excludes financing effects, taxes, and non-operating items. The figure reflects how efficiently the core operations generate earnings from ongoing activities.

Calculation typically involves subtracting operating expenses from revenues. These operating expenses include the cost of goods sold, selling, general and administrative costs, and depreciation and amortization. The rekstrarhagnaðurinn therefore shows earnings after covering the costs of running the business, but before interest payments and income taxes. It does not include gains or losses from investments or one-time extraordinary items unless they arise from regular operating activities.

Presentation and interpretation: Rekstrarhagnaðurinn is usually shown as a line item on the income statement, and is used by analysts to compare operating performance across periods and among peers, isolating core profitability from financing structures and tax regimes. It is closely watched by management and investors as an indicator of the efficiency and scalability of operations.

Relation to other metrics: EBITDA (earnings before interest, taxes, depreciation, and amortization) is rekstrarhagnaðurinn plus depreciation and amortization. Net profit equals rekstrarhagnaðurinn minus interest and taxes and plus or minus any non-operating items. Differences between these measures can highlight financing choices and tax effects, as well as unusual items.

Limitations: The rekstrarhagnaðurinn can be influenced by accounting methods (for example, depreciation) and by what is classified as operating versus non-operating. It should be used together with other indicators for a complete view of financial performance.