1. Finance
  2. Revenue & Profit

Operating Profit Margin


Shows the profitability of standard business activities, excluding any extraordinary items or tax. It gives insights into the core business operations' efficiency. A high margin indicates good profitability from standard operations, while a shrinking margin can suggest rising costs or declining sales.


(Operating Profit / Total Revenue) x 100


If operating profit is $20,000 and total revenue is $100,000, the margin = (20,000 / 100,000) x 100 = 20%.