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Operating Margin Calculator

Use values from the same period and currency. Fees and taxes apply only where explicitly included in inputs.

Use values from the same period and currency. Fees and taxes apply only where explicitly included in inputs.

Your workbenchInputs are not stored

Result

Enter your values and run the tool to see your result.

What this tool does

Shows operating profit as a percentage of revenue. Enter operating profit in the first field and revenue in the second. This is profitability before interest, tax, and non-operating items.

How to use it

  1. Get an income statement for one period.
  2. Enter operating profit in the first field.
  3. Enter revenue in the second field.
  4. Run it to get operating margin as a percentage.

Worked example

Operating profit 100 on revenue 200 is a 50% margin. Operating profit 24 on 200 is 12%.

Calculation method

Ratioa/b*100

Frequently asked questions

How does it differ from gross margin?
Gross margin deducts only cost of goods sold; operating margin also deducts selling and administrative expenses. The gap is large where payroll and marketing are heavy.
Is operating margin enough on its own?
It shows core efficiency well but hides interest and tax. Read it together with net margin.

What this tool does not cover

The definition of operating profit varies slightly by company and standard. When comparing firms, check which costs are inside operating expenses.

References