Non-Operating Income

What is Non-Operating Income?

Non-operating income (also called other income or below-the-line income) includes revenues, gains, and losses from activities that are not part of a company's primary business operations. Common examples include interest income earned on cash holdings, dividends received from investments, gains or losses on the sale of assets, gains or losses on foreign currency transactions, and one-time settlements. On a multi-step income statement, non-operating items appear below operating income and are added or subtracted to arrive at pre-tax income. Analysts typically exclude non-operating income when assessing a company's core operating performance, as it is often volatile and may not recur. A company that shows strong net income driven primarily by non-operating gains may have weaker underlying operational health than its bottom line suggests.