Sales and profit

Operating Margin

The share of revenue left as operating profit: what the main business earns before interest and taxes.

Why does it matter?

It shows how much of each sale the core business keeps after all its running costs, separately from how the company is financed and taxed.

How do I read it?

Typical margins differ a lot by industry, so compare with the company's past and with companies in the same sector. It sits between gross margin (only direct costs) and net margin (all costs, interest and taxes).

How StockLab calculates it

Operating income ÷ Revenue

Example

$15 million of operating income on $100 million of revenue is a 15% operating margin: 15 cents of every dollar of sales left after running the business.

On StockLab

It is in the Advanced View of every company page, with the previous year and the sector median.

Learn moreHow to look at profitability