Operating Profit Margin Calculator

Operating Profit Margin Calculator

This Operating Profit Margin Calculator will help you determine the operating profit margin, given the operating profit and total revenue. The Operating Profit MarginOperating Profit MarginOperating Profit Margin is a profitability or performance ratio that reflects the percentage of profit a company produces from its operations, prior to subtracting taxes and interest charges. It is calculated by dividing the operating profit by total revenue and expressing as a percentage. can be easily calculated by dividing the Operating Profit, located in the income statement, by the total revenue. This margin is also known as EBIT (Earnings Before Interest and TaxEBIT vs EBITDAEBIT vs EBITDA - two very common metrics used in finance and company valuation. There are important differences, pros/cons to understand.) Margin.

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How to Calculate Operating Profit Margin?

Operating profit is calculated by subtracting all COGSCost of Goods Sold (COGS)Cost of Goods Sold (COGS) measures the “direct cost” incurred in the production of any goods or services. It includes material cost, direct, depreciation and amortization and all relevant operating expenses from total revenues. Operating expenses include a company’s expenses beyond direct production costs – such things as salaries and benefits, rent and related overhead expenses, research and development costs, etc. The operating profit margin calculation is a percentage of operating profit derived from total revenue.

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