Profitability & margins
Operating margin
Intermediate
Operating margin is operating income (revenue minus all operating costs — production, sales, admin, R&D) divided by revenue. Example: Revenue $100, operating costs $80 → operating margin = 20%. Meaning: it shows the efficiency of the pure business operations, independent of taxes and financing. A rising operating margin over years is a very positive signal.
Related terms
For educational and informational purposes — not investment advice.
