# Operating Margin

*Accounting & Reporting — Finicade finance glossary*

Operating margin is operating income divided by revenue — profitability after all the costs of running the business but before interest and tax. It's the fairest cross-company comparison of operational efficiency, because it strips out financing and tax choices that differ by structure and jurisdiction. Widening operating margin as revenue grows is operating leverage made visible.

**Formula:** `Operating margin = Operating income ÷ Revenue`

**Also known as:** EBIT margin, operating profit margin

**Related terms:** [Gross Margin](https://finicade.com/glossary/gross-margin), [Operating Income (EBIT)](https://finicade.com/glossary/operating-income), [Net Profit Margin](https://finicade.com/glossary/net-profit-margin), [Operating Leverage](https://finicade.com/glossary/operating-leverage), [EBITDA](https://finicade.com/glossary/ebitda)

Source: https://finicade.com/glossary/operating-margin