Operating margin is a way to measure how well a company can turn its sales into profits after paying for its main costs of doing business. It is calculated by dividing operating income by total revenue and multiplying by 100 to get a percentage. Operating income is the money a company makes from its core operations before paying any interest or taxes. Total revenue is the money a company makes from selling its products or services. The higher the operating margin, the more efficient and profitable a company is. The formula for operating margin is:
Operating margin = (Operating income / Total revenue) * 100
Where:
- Operating income (IS011,
is_oper_income) is the money a company makes from its core operations before paying any interest or taxes.
- Total revenue (IS001,
is_sales_revenue_turnover) is the money a company makes from selling its products or services.