This article was reviewed by Joseph Meyer and by wikiHow staff writer, Eric McClure. Joseph Meyer is a High School Math Teacher based in Pittsburgh, Pennsylvania. He is an educator at City Charter High School, where he has been teaching for over 7 years. Joseph is also the founder of Sandbox Math, an online learning community dedicated to helping students succeed in Algebra. His site is set apart by its focus on fostering genuine comprehension through step-by-step understanding (instead of just getting the correct final answer), enabling learners to identify and overcome misunderstandings and confidently take on any test they face. He received his MA in Physics from Case Western Reserve University and his BA in Physics from Baldwin Wallace University.
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A company’s operating margin is one of the most important figures you can use to assess a company’s health, profitability, and efficiency. To put it simply, a firm’s operating margin is how much profit is left over after paying for the costs of production. However, this isn’t a standard line item in accounting—so you often won’t find it in a company’s books or 10K—which means you’ll need to calculate the margin yourself. In this article, we’ll show you how to do it. Then, we’ll explain why this number is so key if you’re a business owner or investor.
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