Ordinary Profit = Operating Profit + Non-Operating Income − Non-Operating Expenses
What the figure represents
Ordinary profit is calculated by taking operating profit — the profit from the core business — and adjusting it for non-operating income, such as interest and dividends received, and non-operating expenses, such as interest paid. It reflects the profit generated by a company's overall ordinary business activities, including financing activities.
Points to watch when reading it
When there is a large gap between operating profit and ordinary profit, factors outside the core business — such as interest expense on borrowings or dividend income from holdings — may be having a significant effect on profit. Checking operating profit and ordinary profit together helps you gauge the quality of a company's earnings.