Operating Margin
Operating Profit Margin (EBIT Margin)
Profitability RatiosOperating profit (EBIT) as a percentage of revenue. It captures the profitability of the core business after all operating costs but before interest and tax.
Formula
Operating Margin = EBIT / Revenue
Why it matters
It is the margin most comparable across companies in a sector, since it excludes financing structure. Durable margin expansion is one of the strongest drivers of shareholder value.
Indian example
Related terms
Learn the concept
Profitability Ratios →From the research
How The Valuation Node Approaches Research
The research method behind The Valuation Node, how assumptions are stated, how sources are chosen, and how uncertainty is disclosed in every published analysis.
ValuationWhat Three Years of a Cash Flow Statement Reveals That One Year Hides
A single year of cash flow is a snapshot. Three years is a story. Learn what the trend reveals about earnings quality, funding, and sustainability.
ValuationComparing Two Companies on ROE, and Why the Higher One Is Not Always Better
Two companies can report the same ROE for very different reasons. DuPont analysis shows why an ROE built on leverage is not the same as one built on quality.