After Tax Operating Income - ATOI

A company's taxes get figured into its profit and loss statements when they report their results. In these situations, companies often break out before-tax income and after-tax income.

The goal here is to let investors know just where the money is going. Operating income is a slightly more specific version of income. It often leaves out certain items, including things like interest and depreciation. Operating income also allows investors to compare companies and parts of companies on a somewhat neutral footing. Like how nerdy baseball fans will take out park effects and create defense-neutral pitching statistics, operating income makes it easier to compare the underlying profitability of different businesses that might run in highly different environments. An example might include a company that has operations in different countries, each with its own tax, accounting, and regulatory framework.

So after-tax operating income gives a dollars-in, dollars-out look at the company's business operations, leaving out things that investors might consider extraneous, like what it costs to run a government, or what it costs to borrow money to start the business in the first place.