Operating Income - calculation method? income, method, example, material, only

segalm

Hi,

I have seen two ways to calculate operating income from Income Statement.

For example, firm A only has expenses items: COGS, SG&A Expenses, R&D Expenses and Depreciation Expenese in Income Statement.

Method #1: Sales - COGS - SG&A Expenses - R&D Expenses = Operating Income
Method #2: Sales - COGS - SG&A Expenses - R&D Expenses - Depreciation = Operating Income (Also is known as EBIT)


Do you know which method is appropriate according to CFAI material?

Thanks.