Operating Margin Calculator

Definition and formula: Operating margin = (Operating income / Revenue) × 100. Operating income (also known as EBIT) is profit before interest and taxes but after operating expenses. For clarity, this calculator expects a numeric operating income value and total revenue.

Data sources and reconciliation: If operating income is not reported, it can be reconciled from the income statement by starting with gross profit and subtracting operating expenses (selling, general and administrative expenses), and adding or subtracting other operating items. When using net income as the starting point, add back interest expense and tax expense and remove non‑operating gains and losses to approximate operating income, following guidance in financial reporting best practices.

Benchmarks and comparability: Industry structure heavily influences operating margins. Compare margins only to peers in the same industry and the same accounting basis. For standardized financial statement definitions and filing practices, consult regulatory and standard‑setting guidance.

Rounding and display: Results are shown both as a percent and as a ratio. Interpret small differences (e.g., ±0.5 percentage points) in the context of rounding, reporting period differences, and one‑time items.

Example 1: Enter operating income = 150000 and revenue = 1,000,000. Operating margin = (150000 / 1,000,000) × 100 = 15.0%.

Example 2: Enter operating income = -20000 and revenue = 500000. Operating margin = (-20000 / 500000) × 100 = -4.0% (operating loss as a share of revenue).