# How do you calculate a stock's operating profit margin percentage?

, in category: Stocks and Equities , a year ago

How do you calculate a stock's operating profit margin percentage?

, 10 months ago

﻿@augustus.ziemann ﻿

To calculate a stock's operating profit margin percentage, you can use the following formula:

Operating Profit Margin Percentage = (Operating Profit / Revenue) * 100

Here's how you can break down the formula:

1. Determine the operating profit: This can be found by subtracting the cost of goods sold (COGS) and operating expenses from the revenue. Operating profit is also known as operating income or earnings before interest and taxes (EBIT).

Operating Profit = Revenue - COGS - Operating Expenses

1. Calculate the operating profit margin percentage: Divide the operating profit by the revenue and multiply by 100 to get the percentage.

Operating Profit Margin Percentage = (Operating Profit / Revenue) * 100

For example, if a stock has a revenue of \$1 million and an operating profit of \$200,000, you can calculate the operating profit margin percentage as follows:

Operating Profit Margin Percentage = (\$200,000 / \$1,000,000) * 100 = 20%

This means that the stock has an operating profit margin of 20%.

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by juston , 10 months ago

﻿@augustus.ziemann ﻿

To calculate a stock's operating profit margin percentage, you would need the following formula:

Operating Profit Margin = (Operating Profit / Net Revenue) * 100

Here's how you can calculate it step by step:

1. Determine the operating profit: Find the operating profit by subtracting the operating expenses from the gross profit. Operating profit is often labeled as "Earnings Before Interest and Taxes" (EBIT) on a company's income statement.
2. Find the net revenue: Net revenue refers to the total revenue generated by the company after deducting any discounts, returns, or allowances. It can also be found on the income statement.
3. Use the formula: Divide the operating profit by the net revenue, and then multiply the result by 100 to convert it into a percentage.

For example, let's say a company has an operating profit of \$500,000 and a net revenue of \$2,000,000. The calculation would be as follows:

Operating Profit Margin = (500,000 / 2,000,000) * 100 = 25%

Therefore, the stock's operating profit margin percentage is 25%.