Operating Margin
Operating margin is a measure of a company’s profitability. It is calculated by taking the operating income of a company and dividing it by its total revenue. The resulting number is expressed as a percentage and is used to compare the profitability of different companies. Operating margin is an important metric for investors, as it can provide insight into a company’s ability to generate profits from its operations.
History of Operating Margin
The concept of operating margin has been around since the early 20th century. It was first used by investors to compare the profitability of different companies. Over time, the concept has evolved and become more sophisticated. Today, operating margin is used by investors to assess the financial health of a company and to compare it to its peers.
Comparison Table
| Company | Operating Margin (%) |
|---|---|
| Company A | 10.5 |
| Company B | 15.2 |
| Company C | 20.1 |
Summary
Operating margin is a measure of a company’s profitability. It is calculated by taking the operating income of a company and dividing it by its total revenue. Operating margin is an important metric for investors, as it can provide insight into a company’s ability to generate profits from its operations. For more information about operating margin, investors can visit websites such as Investopedia, The Balance, and Yahoo Finance.
See Also
- Gross Margin
- Net Margin
- Return on Assets (ROA)
- Return on Equity (ROE)
- Profit Margin
- EBITDA Margin
- EBIT Margin
- Cash Flow Margin
- Asset Turnover
- Debt-to-Equity Ratio
