operating income vs net income

The operating income excludes several items like the investments in other firms (also known as the non-operating income), interest expenses and taxes. Also, the non-recurring items like the cash paid in lieu of a lawsuit settlement are also not included in the operating income. It is calculated by subtracting the operating expenses from the gross profit of a company. The gross profit is defined as the total revenue minus the costs of goods sold for an organisation. [1]

Operating Income = Gross Income – (COGS + Operating Expenses + Depreciation and Amortisation) | The formula for operating income is as follows:
Net Income = Operating Income + (Investment Income – Interest Expense) + (Extraordinary Income – Extraordinary Expenses) – Taxes |

Operating profit, also known as earnings before interest and taxes (EBIT) [2]

The relationship between operating profit and net income is important because it reflects the impact of non-operating expenses such as interest and taxes on a company's profitability. When interest and taxes are high, they can significantly reduce a company's net income, even if its operating profit margin is high. For example, if a company has a high operating profit margin of 20%, but it has significant interest and tax expenses that reduce its net income to only 5%, then investors may be concerned about the company's long-term financial health. [2]

[1]https://byjus.com/commerce/difference-between-operating-income-and-net-income/

[2]https://fastercapital.com/content/Operating-profit--The-Relationship-Between-Operating-Profit-and-Net-Income.html