Why is interest expense a no operating expense, Basic Statistics

Why is interest expense a no operating expense?

Attention cost is a no operating cost when it is not part of a business's primary functions. For example, a store's primary functions are the purchasing and purchase of products, and producers primary functions are the production and purchase of goods.  Neither the store nor the maker has as its primary functions the credit and loaning of money. (On the other hand, a loan company’s primary function includes interest cost on its depositors’ benefits accounts and interest earnings on its loans and connection assets.)

By confirming interest cost as a no operating cost, it also allows for a better comparison between the operating incomes of a store that has little debts with a store that has a lot of debts.

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Posted Date: 3/31/2012 7:29:18 AM | Location : United States

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