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Glossary · Business quality

Operating margin

Profit from running the business, before interest and tax, as a share of sales.

Why it matters

The cleanest read on how efficiently the core business runs. Cluenex says it as cents kept per dollar of sales.

How to read it

20% or more is strong for most industries. Negative means operations cost more than they bring in.

Related

Gross marginSales minus the direct cost of making the product, as a share of sales.Net marginFinal profit after every cost, interest and tax, as a share of sales.ProfitabilityHow much of each sales dollar the company keeps as profit.

In the Cluenex app, this explanation opens next to every operating margin figure, with the live reading for the stock you are looking at. Open it in Cluenex