Operating margin
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In business, operating margin is the ratio of operating income (operating profit in the UK) divided by net sales, usually presented in percent.
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[edit] Example
[edit] The Coca Cola Company
| Net Operating Revenues | $ 24,088 |
| Gross Profit | $ 15, |
| Operating Income | $ 6,318 |
| Income Before Income Taxes | $ 6,578 |
| Net Income | $ 5,080 |
(Relevant figures in italics)
It is a measurement of what proportion of a company's revenue is left over, before taxes, after paying for variable costs of production as wages, raw materials, etc. A good operating margin is needed for a company to be able to pay for its fixed costs, as interest on debt.
[edit] See also
[edit] External links
[edit] References
- ^ The Coca Cola Company Form 10-K SEC Filing 2006, p 67
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