In this Operating Profit Margin tutorial, we walk you through its most important aspects. You will figure out exactly what Operating Profit Margin is, its formula, how to calculate it, and how to interpret the results. We will also demonstrate how to calculate the Operating Profit Margin in Excel using the Colgate Case Study.
You can download the Colgate Operating Profit Margin template from this link – https://www.wallstreetmojo.com/ratio-analysis-template/
What is Operating Profit Margin?
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Operating Profit Margin is a profitability ratio used to calculate the percentage of profit generated by a company’s operations before taxes and interest are deducted.
Formula
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Operating Profit Margin Formula = Operating Profit/Net Sales * 100
Uses
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– Operating profit helps determine how much profit a company has made from its operations; thus, it ensures efficiency and profitability.
– In addition to gross profit margin and net profit margin, an investor should consider operating profit margin, as it helps bridge the gap in understanding how a company is performing operationally.
For more details, you can refer to our article – https://www.wallstreetmojo.com/operating-profit-margin-formula/
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