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Financial Metrics

Operating margin

Operating margin is operating income divided by revenue, showing profitability from core operations before non-operating items.

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Definition

Operating income divided by revenue, showing profitability from core operations before non-operating items.

In Practice

The owner compares operating margin over time after accounting for direct costs and operating overhead.

Quick answers

What is Operating margin?
Operating income divided by revenue, showing profitability from core operations before non-operating items.