Operating Margin
Operating income as a percentage of revenue — measures core business profitability.
What Is Operating Margin?
Operating margin shows what percentage of revenue is left after paying for both production costs AND operating expenses (salaries, rent, R&D, marketing). It excludes interest and taxes, focusing purely on how well the core business runs.
Formula
Operating Margin = Operating Income / Revenue × 100Why It Matters
Operating margin is often the best single metric for comparing operational efficiency between companies. Improving operating margins indicate operating leverage — the business is scaling efficiently.
Typical Ranges: Varies by industry. Software: 20-40%. Manufacturing: 10-20%. Retail: 3-8%.
Real Examples from Our Database
Based on the latest data in our system. Values may change.
Related Terms
See This Metric in Action
Our DVR Score evaluates operating margin alongside 50+ other metrics to give you one clear picture.
Analyze Any Stock