Operating margin: Difference between revisions
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==External links== |
==External links== |
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*[http://www.investopedia.com/terms/o/operatingmargin.asp Operating Margin] |
*[http://www.investopedia.com/terms/o/operatingmargin.asp Operating Margin] |
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*[http://www.theway2invest.com/what_is_operating_margin_ratio What is operating margin ratio] |
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==References== |
==References== |
Revision as of 13:49, 16 November 2008
In business, operating margin, Operating Income Margin, Operating profit margin or Return on sales (ROS) is the ratio of operating income (operating profit in the UK) divided by net sales, usually presented in percent.
Example
The Coca Cola Company
Net Operating Revenues | $ 24,088 |
Gross Profit | $ 15,924 |
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, such as interest on debt.
See also
External links
References
- ^ The Coca Cola Company Form 10-K SEC Filing 2006, p 67