Operating Margin Calculator

Calculate operating margin as operating income divided by revenue and express the result as a percentage.

Operating Margin & Profitability Calculator

Calculate Operating Income (EBIT), Operating Margin %, Gross Margin %, and full P&L profitability conversion.

Total Revenue ($)

Gross sales / turnover

Cost of Goods Sold (COGS) ($)

Direct production / service costs

Operating Expenses (OPEX) ($)

Salaries, marketing, rent, software

Interest Expense ($) (Optional)

For bottom-line net profit

Taxes ($) (Optional)

Corporate income taxes

Operating Margin

24%

Operating income as % of sales

Operating Income (EBIT)

$120,000

Gross profit − OPEX

Gross Margin

60%

$300,000 gross profit

Net Profit (Bottom Line)

$80,000 (16%)

After interest and taxes

Strong operating margin of 24%.

High operational efficiency. The company converts 24¢ of every dollar into pure operating profit before interest and taxes.

Disclaimer: This tool provides informational results only and should not be used as professional advice.

The Operating Margin Calculator expresses operating income as a percentage of revenue.

$\text{Operating margin}=\frac{\text{Operating income}}{\text{Revenue}}\times100$

Example

With $80,000 operating income and$ 500,000 revenue, operating margin is 80,000 / 500,000 x 100 = 16%.

Questions

Can operating margin be negative?

Yes. Negative operating income produces a negative margin.

Is operating margin the same as net margin?

No. Operating margin excludes items such as interest, taxes, and other non-operating effects that may be included in net margin.

What if revenue is zero?

The calculator rejects zero or negative revenue because the ratio would be undefined or misleading.

Limitations

Use consistent accounting periods and definitions for revenue and operating income when comparing results.

Related Tools

Investment Return Calculator

Estimate investment profit, total return, annualized return, and ending value from contribution and growth assumptions.

Use Tool

Loan Calculator

Calculate your monthly repayments, total interest payable, comparison rate, and full amortisation schedule instantly.

Use Tool

Loan EMI Calculator

Calculate your exact monthly loan repayment, total interest, and total cost before you sign. Get a full month-by-month amortisation schedule instantly.

Use Tool

Operating Margin Calculator