Operating margin
#16GUIDING QUESTION
How much is left after covering operating expenses?
Efficiency of the core business (EBIT/Sales).
01.What it is
Operating profit over sales, before interest and taxes.
02.Component masses
- EBIT
- Sales
03.Formula
MAIN FORMULA
Operating margin (%): EBIT ÷ Sales
04.Interpretation
- High → operating efficiency.
- Low/negative → fragility.
05.Related to
- Gross margin
- Net margin
- ROA/ROE