Operating income measures a company’s efficiency and performance and is the profit after operating expenses have been subtracted from gross profit. Before delving further into operating income ...

It’s used by taking the net operating income (NOI) of the rent collected and dividing it by the capitalization rate. The income approach is a real estate valuation method that uses the income ...

The cap rate formula involves dividing a property's net operating income (NOI) by its purchase or appraised value. Higher cap rates suggest higher return potential but also greater investment risks.