Glossary

Metric

Operating Margin

Profit left after paying for the full operation, before interest and taxes.

Formula

Operating Income ÷ Revenue

Definition

Operating margin captures what a company earns from its core business after all operating costs (salaries, R&D, marketing, rent) but before financing decisions or taxes.

Why it matters

It reflects how well management runs the business day-to-day. Consistent, expanding operating margins suggest scale, discipline, and pricing power.

Building blocks

Operating Income
Profit from core operations, before interest and taxes.
Revenue
Total money earned from selling products or services.

Educational information only, not investment advice. Turtleway helps you understand what a metric or concept means; it does not tell you what to buy or sell.