A common question asked in business “What do you mean by Operating margin?†.In business terms also known as operating profit margin or operating income margin can be defined as operating profit to the net sales which is usually presented in percentage.
operating margin=operating income/Revenue
operating profit is a net profit that measures profitability of a company or a business after accounting overall costs.
The main purpose of the it is to measure the profit of a particular business. It is a deciding factor to decide whether a business is in profit or loss.
Every company OR business is a group of projects and different sections and every section of the business performance can be measured individually.
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The operating margin measures how much profit a company makes on a dollar of sales, after paying for variable costs of production, such as wages and raw materials, but before paying interest or tax. It is calculated by dividing a company’s operating profit by its net sales.
Wednesday, October 13, 2021
