operating profit margin

operating profit margin definition - finance
A financial measurement that is derived by dividing operating profit by net sales, in dollars. Operating profit is calculated by subtracting sales, general, and administrative expenses (SG&A) from gross profit. Operating profit margin indicates how profitable the companyÂ’s operations are. If the margin decreases, then the companyÂ’s profitability is declining.

Webster's New World Finance and Investment Dictionary Copyright © 2003 by Wiley Publishing, Inc., Indianapolis, Indiana.
Used by arrangement with John Wiley & Sons, Inc.

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