Series 79: Operating Margin

Operating Margin

Operating margin, also known as operating profit margin, indicates the percentage of each dollar of sales that is left over after the company pays the cost of goods sold and its operating expenses, such as SG&A. Since a company has (or should have) the ability to control its operating expenses, operating margin is a useful metric for determining the company’s relative operating efficiency, the effectiveness of its pricing strategy, and how well it controls its costs. An increasing ope