Accounting
Intermediate

Operating Margin

Profit from core operations as a percent of revenue.

Formula

OM=Operating IncomeRevenue×100OM = \frac{\text{Operating Income}}{Revenue}\times 100

Variables

IncomeOperating income
RevenueSales

Example

Core profitability

Did You Know?

Operating margin shows profit from core business before the noise of taxes and interest.

profitability