ES-39. Identifying Operat ing Income Components L06 Following is the income statement information from Apollo Medical Devices. Identify the components il:~ii that we would consider operating.

$ thousands Net sales . ..... ..... . . ..... ....... . .. ... . . .. . ... .. .. . .. . .
Cost of sales before special charges ........ . .... . ....... . .. . .
Special inventory obsolescence charge .... .. . . ... .. .. . . .. .. . . .
Total cost of sales ....... .. ........... . .. .. ... . ....... . .. . .
Gross profit. ... .. .... .... .. ........ . ..... . .. . . . ... .. .. . . .
Selling, general and administrative expense .... .. . . . . . ....... . .
Research and development expense ... . ......... . . . . .... . .. . .
Merger and acquisition costs .... .. .. .. ...... .. . . . . . .. .. . .. . .
In-process research and development charges ..... . . . . .. .. . .. . .
Litigation settlement ...... . . .................. . .. . .... . .. . .
Operating profit. ............. . .... . ..... . .... . .. . .... . .. . .
Interest expense .... .. .. .. ... . ... . . ... . . . . ... . .. . ... . . .. . .
Interest income ................... . .. . ... . ... . ....... . .. . .
Gain on disposal of fixed assets ............ . . . .. . ........... .
Impairment of marketable securities ...... . .. . ............ . .. . .
Other income (expense), net ........... . ....... . .......... . .
Earnings before income taxes ....... . ..... . .... . ....... . .. . .
Income tax expense .. .. ..... .. ... . . .. . .. . . ... . .. . .. .. . .. . .
Net earnings . . .. .. .. ... .. . .. . .... . . . . .. . .... . . . . .. .. . .. . .

2020 $4,163,770 1,382,235 27,876 1,410,1 11 2,753,659 1,570,667 531,086 46,914 12,244 16,500 576,248 (57,372)
2,076 4,929 (5,222)
(2,857)
517,802 191,587 $ 326,215