# Operating Margin

Operating profit as a percentage of revenue.

## Definition

Operating margin measures how efficiently the company converts revenue into operating profit after all operating costs. It captures both gross-margin quality and operating-expense discipline in one number.

## Formula

(Operating Profit ÷ Revenue) × 100

## Why it matters

Operating margin trend is one of the cleanest measures of operating leverage: when revenue grows faster than operating expenses, margin expands. When the opposite happens, margin compresses — usually a sign of competitive pressure or undisciplined spending.

## How Standard Equity uses it

Shown in the main financial table. For banks we substitute the Efficiency Ratio (where lower is better), which captures the same idea.

## The metric

| Category | Margins |
| -------- | ------- |
| Unit     | %       |

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