Operating Margin Calculator

What is Operating Margin?

Operating Margin (also called operating profit margin or return on sales) is a profitability ratio that measures what percentage of revenue a company retains after paying for variable costs of production (COGS) and operating expenses. It shows how efficiently a company manages its core business operations excluding the effects of financing and investment income.

Operating Margin Formula

The operating margin is calculated using the following formula:

Operating Margin = (Operating Income / Revenue) × 100%

Where:

• Operating Income = Revenue - COGS - Operating Expenses (salaries, rent, utilities, marketing, R&D, depreciation)
• Revenue = Total sales or income generated from operations

How to Use This Calculator

1. Enter your Total Revenue.
2. Enter your Operating Income (or calculate from revenue minus COGS and operating expenses).
3. Select your preferred precision.
4. View your operating margin percentage and detailed financial breakdown.

For related profitability tools, try the Gross Profit Margin Calculator or Markup Calculator.