Operating Profit Margin

Operating Profit Margin - Operating Profit Margin is measures a company or corporation operating efficiency and pricing efficiency with its successful controlling costs. The higher the ratio translates to the better a company is functioning. A higher operating profit margin means a company has lowered fixed cost and a better gross margin or increasing sales faster than the costs, which give management more flexibility in determining price. It provides valuable information for stock investors to determine the quality of a company when looking at the trend in operating margin over time and to compare with the industry equals, divided by revenues for a quarter.