Know your metric
Importance of
Operating Margin
Profitability Gauge
Direct measure of company profitability after operating expenses.
Cost Management
Reflects the effectiveness of cost management strategies.
Operational Efficiency
Indicates overall operational efficiency and cost control.
Drawbacks of
Operating Margin
Excludes Non-Operating Costs
Doesn’t account for taxes or interest expenses.
Not Comprehensive
Provides a partial view of financial health.
Affected by Accounting Choices
Can vary significantly with different accounting practices.
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