Operating Margin

Operating Margin- is the ratio of operating profit divided by net sales, usually presented in percent.

 


Net profit measures the profitability of ventures after accounting for all costs.Return on sales (ROS) is net profit as a percentage of sales revenue. . . . ROS is an indicator of profitability and is often used to compare the profitability of companies and industries of differing sizes.

eg Google has an Operating income of 3,203,000 and a revenue of 12,214,000, therefore this gives an operating margin of (3,203,000/12,214,000)*100 = 26.2%

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