Operating Margin Calculator
Compute operating income (EBIT) and operating margin from revenue, cost of goods sold and operating expenses.
Your inputs
Results
Operating margin
15%
- Operating income (EBIT)
- $30,000.00
- Operating expense ratio
- 25%
✓Exact calculation — rounded only for display
What this calculator does
Operating margin shows how much profit a business makes from its core operations before interest and tax.
Formula and method
Worked example
Calculated by this tool with its default inputs:
Inputs
- Revenue: 200000 (any currency)
- Cost of goods sold: 120000 (any currency)
- Operating expenses (incl. depreciation): 50000 (any currency)
Results
- Operating margin: 15%
- Operating income (EBIT): 30,000
- Operating expense ratio: 25%
How to read the results
Compare with peers in the same industry; capital-intensive industries often run lower margins.
Assumptions and limitations
- Include depreciation in operating expenses for EBIT.
Financial results are estimates based on the inputs and assumptions shown. They are not financial advice; confirm figures with your lender, provider or a qualified adviser before making decisions.
Questions
Is EBIT the same as operating income?
Often yes, though some definitions add non-operating items.
Methodology and verification
- Result type
- Exact mathematical calculation (rounded only for display)
- Formula version
- 1.0
- Automated verification
- 2 reference and validation test cases, checked against independently computed values. The site cannot be built if any of them fail.
- Editorial review
- Awaiting human editorial review. The explanation was drafted with AI assistance; the formula and examples are verified by the automated tests above.
Privacy
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