Operating Margin (OM)
Operating income as a percentage of revenue
FORMULA
Operating Margin % = (Operating Income / Revenue) × 100
Alternate Calculations
Operating Income
Gross Profit - Operating ExpensesExtended
((Revenue - COGS - Operating Expenses) / Revenue) × 100What is Operating Margin?
Operating Margin measures the percentage of revenue that remains as profit after paying operating expenses (salaries, rent, utilities, etc.) but before interest and taxes. It shows how much profit a company makes on every dollar of sales from core operations. This metric is crucial for assessing operational efficiency and profitability independent of financing and tax strategies.
Chart
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1,900,000revenue · Q4Operating Margin
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Sample Data
| quarter | revenue | opIncome | margin |
|---|---|---|---|
| Q1 | 1,500,000 | 300,000 | 20 |
| Q2 | 1,625,000 | 325,000 | 20 |
| Q3 | 1,750,000 | 367,500 | 21 |
| Q4 | 1,900,000 | 437,000 | 23 |
Required Data Columns
RevenueOperating IncomeOperating Expenses