Enter the total operating income and the total revenue into the calculator to determine the total operating margin.

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## Operating Margin Formula

The following formula is used to calculate an operating margin of a particular business or business section.

OPM = OI / R

- Where OPM is the operating margin
- OI is the operating income
- R is the total revenue

## Operating Margin Definition

An operating margin, much like a net margin, is a measure of the profitability of a company. It’s a ratio of the core operating income to the total revenue. In other words, how profitable the core operations are in comparison to the total revenue.

## Example Problem

The following example problem is a guide for calculating an operating margin.

How to calculate operating margin?

**First, determine the total operating income.**This is the total income generated from the core operations of a business.

**Next, determine the revenue.**Calculate or measure the total revenue of the business. This includes bother operating revenue and outside revenue.

**Finally, calculate the operating margin.**Using the formula above, calculate the operating margin.