Operating Margin
Operating income divided by revenue.
Operating margin shows how much profit a company earns from its core operations before interest and taxes. It captures both gross profitability and operating expense control. Expanding operating margins often signal improving unit economics or operating leverage.
Formula
Related Terms
Gross Margin
Revenue minus COGS, divided by revenue.
EBITDA Margin
EBITDA divided by revenue (TTM).
Net Margin
Net income divided by revenue (TTM).
Market Capitalization
Share price multiplied by shares outstanding — the total equity value.
Enterprise Value (EV)
Market cap plus net debt — the total acquisition value of the business.
P/E Ratio
Share price divided by earnings per share — how much you pay per dollar of profit.