Operating margin calculator

Answers the question: What is my operating margin?

This operating margin calculator is for you if you want to find your company's ability to generate profit. The operating margin is a great way to compare a company's earnings after deducting costs. In the field named operating expenses, you must remember to input all variable production costs, such as wages and raw materials. All numbers should be before baying interest or tax.


Operating income: $ 650,000
Operating margin: 72.22 %

Operating margin is the ratio of a business's operating income to its return on sales. Generally speaking, an operating margin above 15% is considered good. As a comparison, the average operating margin for all companies in the S&P500 index was 12.29% in 2022.

Our calculations

At Calculatorian, we are keen to share our knowledge, be transparent and open to feedback. Here are the calculations used to create this calculator. If you find an error or deficiency, contact us and we'll fix it in an instant!

Operating income was calculated like this:

Operating margin was calculated like this:

Variables used in this formula

r = Revenue
c = Costs of sold goods
oe = Operating expenses