Operating income is a financial metric that measures the profit a company makes from its core business operations, excluding any income from non-operational activities like investments or sales of assets. It is calculated by subtracting operating expenses, such as wages and rent, from revenue generated from sales of goods or services. This figure is important because it provides insight into how efficiently a company is running its primary business. A higher operating income indicates better performance and profitability, while a lower figure may suggest issues with cost management or sales effectiveness.