Operating margin
Share of revenue left after all running costs (staff, research, marketing), before interest and tax.
Worked example · a round-number company
Operating income$750M÷Revenue$5.0B=Operating margin15.0%How to read it
↑Higher is better. Watch the direction too: a rising margin usually means the business is scaling.
Example Co. 15.0%
Under 10%10% to 25%Over 25%
Above 25% is excellent for most industries.
Keep in mind
- Restructuring and other one-off charges can sit inside operating income.