Operating Margin Calculator

Updated: Jun 10, 2018

Operating Margin Calculator is a tool that computes the profit a firm makes after paying for variable costs of production but before paying interest or tax

Operating Margin:
Background Information

What does Operating Margin mean?
Operating margin is the measure of profitability and indicates how much of each dollar of revenues is left. Over after both costs of goods sold and operating, expenses are considered.
Operating Margin = Operating Earnings / Revenue

Income Statement for Company XYZ, Inc.

Costs of Goods Sold$500,000
General & Admin. Expenses$50,000
Operating Earnings$150,000

According to the formula, Operating Margin is:-

  • = $150,000 / $1,000,000
  • = 0.15 or 15%

This means that for every $1 in sales, the Company XYZ makes $0.15 in operating earnings.


You may also like...

Acid Test Ratio Calculator

Compute the quick or acid test ratio needed to run a business

View Tool

Average Collection Period Calculator

Determine the amount of time a business takes to receive payments

View Tool

Cash Flow Margin Calculator

Measure cash from operating activities as a percentage of sales revenue in a given period

View Tool

Comments 0


Jun 10, 2018
Tool Launched