operating margin

Page history last edited by Brian D Butler 1 yr ago

 

\mathrm{Operating\ margin}=\left ( \frac {\mathrm{Operating\ income}}{\mathrm{Revenue}} \right )

 

 

Example

 

The Coca Cola Company

 

(In millions)

Consolidated Statements of Income[1]
Net Operating Revenues $ 24,088
Gross Profit $ 15,
Operating Income $ 6,318
Income Before Income Taxes $ 6,578
Net Income $ 5,080

(Relevant figures in italics)

 

 

\mathrm{Operating\ margin}=\left ( \frac {6,318}{24,088} \right )=\underline{\underline{26.23 %}}

 

 

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, as interest on debt.

 

Operating Margins at Internet companies

 

 

 

 

 

 

 

 

 

Links to KookyPlan pages 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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