Subsection of: Financial Ratios, Calculators and Impressing Investors
Provided by the International Finance Corporation
This is similar to the gross profit margin, except it measures the extent to which the total sales figure is converted into profit after the normal costs of running the business have been met. It is normally presented as a percentage and represents the return the business is earning from normal operating activities.
As with gross profit margin, there is no ‘normal operating profit margin. The higher the percentage the better is the rule to go by.
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