Chapter 12, Problem 4UTI

To determine

Operating profit:

Operating profits are the profits earned out of the core business operation. Any profits earned out of the investments made are not included. Operating profit is also called as Earnings before interest and taxes (EBIT).

Consolidated Operating profits:

Consolidated Operating profits are prepared to show the consolidated profits of parent company and subsidiary company together to show the combined profits of all parent and subsidiary companies.

Reason behind reportable segment’s total operating profit not being equal to the consolidated operating profit.