What is the formula for calculating Merchandise Net Operating Income?

The formula for calculating Merchandise Net Operating Income is correctly represented by the choice that specifies Revenue minus the sum of Cost of Goods Sold and Operating Expenses. This approach provides a clear understanding of how net operating income is derived from sales revenue: it takes into account the total cost associated with producing and selling merchandise, including both the cost of goods sold (which reflects the direct costs of inventory) and the operating expenses (which cover other costs necessary to run the business).

By subtracting both of these expenses from revenue, you can accurately assess how much profit is generated from operating activities related to merchandise. This calculation is vital for determining the financial health and operational efficiency of a retail or merchandise-centered business, as it reflects the income available after covering the necessary costs of generating that income.