Operating Profit Margin Calculator

What is Operating Margin?

Operating margin (also called operating profit margin) divides operating income (EBIT) by total revenue, expressing as a percentage how much of each revenue dollar survives after paying for cost of goods sold, selling, general and administrative expenses, and depreciation — but before interest and taxes. It isolates operational efficiency independently of capital structure and tax policy, making it useful for comparing companies and tracking improvement over time. High-margin businesses often have strong pricing power or scalable cost structures.