Operating Margin Calculator: Measure Your Business Profitability Instantly
Calculate your operating margin by dividing operating income by sales revenue, then multiply by 100 %. A 2022 survey put the average S&P 500 operating margin at 13.4 % (Statista, 2023). Use higher margins to signal efficient operations and benchmark against peers.
Operating Margin Calculator
Operating Margin:
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How to use the tool
Enter Operating Income: Type your figure in dollars—for example 80 000 or 125 000.
Input Sales Revenue: Add total sales such as 200 000 or 500 000. Revenue must be positive.
Select “Calculate”: The script divides income by revenue and shows the percentage instantly.
Interpret the number: A higher percentage means your core operations generate more profit per dollar sold.
Average S&P 500 operating margin: 13.4 % in 2022 (Statista, 2023).
Manufacturing firms post median 8.7 % margins (NYU Stern Data, 2023).
A margin below 0 % signals unprofitable operations (CFI, 2022).
Credit analysts flag margins under 5 % as “vulnerability” (Moody’s Methodology, 2021).
FAQ
What is operating margin?
Operating margin is the percentage of sales left after paying operating costs; taxes and interest are excluded (Investopedia.com).
How does the calculator work?
You enter income and revenue; JavaScript divides the two numbers, multiplies by 100, and displays the result—no manual math.
What input range is allowed?
Both fields accept any positive number up to 1 e+15, covering startups to multinationals.
Why must sales revenue be positive?
Division by zero or negative revenue distorts percentages and misrepresents profitability (CFI, 2022).
When should you recalculate margin?
Update margins monthly or quarterly to spot cost trends early (PwC “Finance Benchmarking”, 2022).
What is a good margin by industry?
Software averages 23 %, retail averages 5 %—compare only within your sector (Damodaran Industry Margins, 2023).
Can operating margin exceed 100 %?
No. Operating income cannot surpass total sales because income is derived from sales (SEC Staff Accounting Bulletin).
What does a negative margin mean?
Expenses outstrip revenues; management should cut costs or raise prices to restore profitability (Harvard Business Review, 2020).
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