Definition
Operating margin is a profitability ratio that measures how much profit a company makes on a dollar of sales after paying for variable costs of production, distribution, and administration. It is calculated as operating income divided by revenue.
Why it matters (in Poovi’s context)
Figma’s operating margin of 18% provides insight into its profitability after considering operational expenses, contributing to its strong financial standing.
Key properties or components
- Operating Income divided by Revenue
- Reflects operational efficiency
- Includes costs beyond COGS
Contradictions or debates
None.