Operating Margin

What is Operating Margin?

Operating Margin is an accounting term which refers to the efficiency of the operations of a company and shows the profit of a company after operating expenses have been taken into account but before interest and taxation. 
The calculation for Operating Margin is simply Operating Income divided by Net Sales. Essentially, Operating Margin is the profit made per dollar on all its sales. For example, an Operating Margin of 5% means the company makes $0.05 profit excluding taxation and interest) on every $1 worth of sales.

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