An acronym for net operating income; an entity’s operating income (OI) that reflects an entity’s gross revenue (gross earnings or gross profit) net only of all relevant operating expenses. Net operating income (NOI) results from setting operating income against operating expenses, with all other types of “non-operating” expenses not excluded.
Net operating income gauges operational performance of an entity, that is, it performance related to its core operations (the value proposition on which it operates and is in business). This is particularly what sets this measure of income apart from another measure called net income (NI). In fact, net operating income has to do with recurring business profitability, before the impact of taxes and capital structure.
As it does not take into account (i.e., it is not net of) taxes (T) and interest expenses (I), it is also known as earnings before interest and taxes (EBIT).
Net operating income is also known as net operating profit (NOP).
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