The operating margin measures the profitability of a company’s core operations and indicates the percentage of revenue that remains after deducting operating expenses.
Page written by Ian Hawkins. Last reviewed on May 15, 2025. Next review due April 6, 2027.
This calculator is intended for illustration purposes only and exact payment terms should be agreed with a lender before taking out a loan.
To calculate the operating margin, you need to have the financial information of a company, specifically its revenue and operating income. Here’s how to calculate the operating margin:
Gather financial information: Obtain the company’s financial statements, such as the income statement, which provides details of the revenue and expenses.
Identify operating income: Locate the operating income figure on the income statement. Operating income, also known as operating profit or earnings before interest and taxes (EBIT), represents the profit generated from the company’s core operations before considering interest expenses and taxes.
Determine the revenue: Find the revenue figure on the income statement. Revenue represents the total amount of money generated from the company’s sales of goods or services.
Calculate the operating margin: Divide the operating income by the revenue and multiply the result by 100 to express it as a percentage. The formula for calculating the operating margin is:
Operating Margin = (Operating Income / Revenue) x 100
The operating margin provides insights into a company’s profitability and efficiency in managing its operational costs. It is a useful metric for comparing the performance of companies within the same industry or tracking a company’s performance over time.
We work with world class partners to help us support businesses with finance
Swoop Finance Limited helps UK firms access business finance by working directly with businesses and their trusted advisors. We act as a credit broker, not a lender, and do not provide loans or finance products ourselves. We introduce applicants to a panel of lenders, equity funds, and grant agencies based on individual circumstances and creditworthiness.
Commission Disclosure: We typically receive a commission from the finance provider (either a fixed fee or a fixed percentage of the amount you receive) upon successful placement. Different providers pay different rates. For certain lenders, we may have influence over the interest rate, which can impact the total amount payable under your agreement.
Regulatory Information:
FCA: Authorised and regulated by the Financial Conduct Authority as a credit broker (FRN: 936513) and registered as an Account Information Services Provider (Ref: 833145).
ICO: Registered with the Information Commissioner’s Office (Ref: ZA600162); registration can be verified at ico.org.uk.
Company Details: Registered in England & Wales with Companies House (No. 11163382). Registered Address: The Stable Yard, Vicarage Road, Stony Stratford, Milton Keynes, MK11 1BN. VAT Number: 300080279.
Terms: All finance and quotes are subject to status, income, and terms and conditions. Applicants must be aged 18 or over. Guarantees and indemnities may be required. Please refer to our terms and conditions and our complaints procedure for further details.
UK
IRE
AU
CA
US
ZA
NA
yet? Register here!