← Glossary · Financial ratios
Operating margin
How much of revenue is left as operating profit after running costs.
Operating margin divides operating profit (EBIT) by revenue. 15 % means that of 100 € in revenue, 15 € is left after materials, staff and other running costs.
High margins suggest pricing power. Falling margins can show rising costs or competitors pushing prices down. Comparisons only make sense within a sector.
