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:
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- 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.
- Formula
- Operating Margin = Operating Earnings / Revenue
- Example
Income Statement for Company XYZ, Inc.
Revenue $1,000,000 Costs of Goods Sold $500,000 Labor $300,000 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.
History
- Jun 10, 2018
- Tool Launched
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