What is the formula for calculating operating profit?

The formula for calculating operating profit is indeed found in the choice that indicates subtracting operating expenses from gross profit. Operating profit, also known as operating income or EBIT (Earnings Before Interest and Taxes), represents the profit a company makes from its core business operations, excluding any revenue derived from other sources such as investments, interest income, or expenses related to non-operational activities.

To obtain operating profit, one first calculates gross profit, which is derived from subtracting the cost of goods sold (COGS) from total revenue. From this gross profit, operating expenses (which include selling, general, and administrative expenses) are subtracted. The resulting figure gives a clearer view of the company's operational efficiency, as it focuses solely on the income generated from regular business activities, reflecting how well the company's management is running its core operations.

The other options do not align with the definition of operating profit. Total expenses include not only operating expenses but also interest and taxes, thus misrepresenting operational efficiency. Net income adds other comprehensive income and does not specifically measure operating profitability. Lastly, total revenue minus total liabilities does not pertain to profitability, as it confounds income with the company's financial obligations.