What Is Operating Margin?
➡️ What Is Operating Margin? - ✳ Definition: Operating margin, also know as EBIT margin, is an indicator of a company's profitability and is obtained by dividing operating income by sales. Operating income is the difference between cost of goods sold plus operating expense and sales. The higher the EBIT margin, the more profitable and efficient the company is. - ✳ Formula: Operating margin = Operating income / Sales Operating margin = (Sales - Cost of goods sold - Operating expense) / Sales - ✳ Example: Let's take an example with Coca-Cola ($KO). For the year 2019, the company reported the following figures: Sales: $37.27 B Cost of goods sold: $14.62 B Operating expenditure: $12.11 B Thus, the operating income is as follows: $37.27 - $14.62 - $12.11 = $10.53 B As a result, the EBIT margin is: $10.53 / $37.27 = 28% - *Remember this isn't investment advice, just general information only. Any investing involves risks.* - ❤️ Like | 👇 Save | 📣 Share | 💬 Comment 🏆 Many thanks for your support 🏆 - 👉Follow @11Graphs for more👈 👉Follow @11Graphs for more👈
