Operating Profit Margin Calculator
Operating Profit Margin Calculator
| Income Statement Item | Value |
|---|---|
| Revenue | $100,000 |
| Cost of Goods Sold | $60,000 |
| Gross Profit | $40,000 |
| SG&A Operating Expenses | $20,000 |
| Depreciation & Amortization | $5,000 |
| Total Operating Expenses | $25,000 |
| Operating Profit (EBIT) | $15,000 |
| Operating Profit Margin | 15.0% |
How Each Revenue Dollar Is Spent
Summary
The Core Profitability View
Operating profit margin is the income statement metric investors read first: it shows how efficiently a business converts revenue into profit from its core operations, before financing and taxes distort the picture. With the defaults, a $100,000 company with $60,000 COGS, $20,000 SG&A, and $5,000 of depreciation keeps $15,000 — a 15.0% operating margin.
Gross, Operating, and EBITDA Margins
Each margin strips away a different layer. Gross margin (40.0%) shows product economics before overhead. Operating margin (15.0%) includes SG&A and depreciation. EBITDA margin (20.0%) adds depreciation back for a cash-based view. Comparing the three reveals whether a business is losing money to product costs, overhead, or capital intensity.
Frequently Asked Questions
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