Operating Margin Calculator
Measure profitability from core operations, before interest and tax.
What the Operating Margin Calculator does
Operating margin shows how much profit each dollar of revenue produces from core operations, before interest and tax. Because it excludes financing choices, it is the fairest way to compare two companies in the same industry.
Formula
Operating income = Revenue − COGS − Operating expensesOperating margin % = Operating income ÷ Revenue × 100
Inputs explained
| Input | Unit | Required | Notes |
|---|---|---|---|
| Revenue | selected currency | Yes | Accepts more than 0. |
| Cost of goods sold | selected currency | Optional | Accepts 0 or more. |
| Operating expenses | selected currency | Yes | Accepts 0 or more. |
| Currency | one of 10 options | Optional | — |
How to use it
- Choose Currency.
- Enter Revenue and Operating expenses.
- Optionally add Cost of goods sold.
- Select Calculate.
Worked example
$1,200,000 revenue, $480,000 COGS, $540,000 operating expenses.
- Revenue
- 1200000
- COGS
- 480000
- Opex
- 540000
Operating income $180,000 — a 15% operating margin.
Frequently asked questions
What is a good operating margin?
It varies hugely by sector. Software often exceeds 20%; grocery retail runs 2–4%. Compare against direct competitors, never across industries.
How is this different from EBITDA margin?
Operating margin deducts depreciation and amortisation; EBITDA adds them back. EBITDA flatters capital-intensive businesses.