What is Operating Margin?
Operating Margin A profitability ratio calculated as operating income divided by net sales, indicating the proportion of revenue remaining after covering operating expenses but before interest and taxes.
Source: CFA Institute, IFRS Foundation, FASB (GAAP), Basel III Framework
How is “Operating Margin” Used in Practice?
A higher operating margin indicates efficient cost management and strong profitability from core business operations.
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Who Needs to Know This Term?
- Financial Analysts
- Bankers
- Traders
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What is Operating Margin?
A profitability ratio calculated as operating income divided by net sales, indicating the proportion of revenue remaining after covering operating expenses but before interest and taxes.
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