Sales of goods and services less the sum of cost of goods and services sold plus selling, general and administrative expenses. Operating margin is often expressed as a percentage of sales - the operating margin rate.
The key measure of profitability and performance is a company's operating margin. The operating margin is determined by subtracting the operating expenses from the total revenues and then dividing that result by the total revenue. One time gains and losses, interest expenses, interest income, other income, and taxes are excluded from the operating margin.
The operating margin of a company is a key measure of profitability and performance. The operating margin is determined by deducting operating expenses (e.g.. cost of goods and services, sales and marketing, general and administrative, and depreciation and amortization) from total revenues and then dividing the result by total revenues. Note that operating margin excludes interest expense, interest income, other income, one-time gains or losses and taxes.
A company's profitability before non-cash charges. The operating margin is calculated by dividing EBITDA (earnings before interest expense, taxes, depreciation and amortization) by revenues and then multiplying by 100. It is a measure of operating efficiency at a company.
A companyâ€(tm)s profitability after all operating costs have been paid. Operating margin is calculated by dividing cash flow by revenue and then multiplying by 100. The result is expressed as a percentage. Operating margin shows you how profitable a company is before interest expenses on debt and depreciation costs have been deducted. Since accountants often manipulate depreciation and amortization costs on income statements, many analysts feel operating profit paints a truer picture of a companyâ€(tm)s profitability.
A measurement of a company's relative profitability calculated by dividing operating profit (the profit realized from one year's business operations) by net sales. The higher the percentage, the better.