™$200,000 operating profit divided by $1 million revenue gives a 20% operating margin before specified non-operating and tax effects.
Fundamentals
Operating margin
Operating income divided by revenue, measuring profit after operating costs under accounting rules.
Plain-English context
Put the definition to work.
Accounting classification and one-time items can affect comparability; operating income is not net cash flow.
Further reading and verification. Examples are hypothetical, not current quotes or recommendations. Product terms, tax treatment and market rules can change. SEC — Financial statements