Operating Margin Calculator

Written by:
PK

Below is an operating profit margin calculator or operating margin calculator to compute a company's operating margin using its revenue and operating profit (or operating income or income from operations). Enter a company's top line revenues and operating income to compute its operating margin

Operating Profit Margin Calculator

What is the Operating Margin?

The operating margin shows how efficiently a company turns revenue into operating income by showing margin after operating expenses and COGS (cost of goods sold). Operating expenses include everything from rent and insurance to marketing, sales, R&D, and other employee costs (except manufacturing employees, who would roll into COGS).

Operating margin is very similar to EBIT margin – for some companies, operating income and EBIT are equivalent. However, EBIT includes non-operating expenses and income, so many companies will differ in the two measures.

Operating Margin Formula

The formula for operating margin is:

Operating\ Margin=\frac{operating\ income}{revenue}

Where:

  • Operating Income: Operating Income, Income from Operations, or Operating Profit from the earnings statement.
  • Revenue: The company's top line sales

Margin Calculators

While operating margin is a useful metric, try some of the other margin calculators:

      

PK

PK started DQYDJ in 2009 to research and discuss finance and investing and help answer financial questions. He's expanded DQYDJ to build visualizations, calculators, and interactive tools.

PK is in his mid-30s and works and lives in the Bay Area with his wife, two kids, and dog.

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