What share of sales survives as operating profit
Operating margin is operating profit divided by revenue, as a percentage. On the same revenue, a higher margin means the company earns more efficiently. Industries that compete on price run thin; those with distinctive technology or brands run wide. Because the normal level differs so much, compare within an industry.
Operating profit of $50 million on revenue of $500 million is a 10% margin — 10 of every 100 in sales.
For learning, not investment advice. Decisions are your own.
StockFit · TrueNorthLabs Inc.