In economics, operating margin is the ratio of operating income divided by sales revenue. See the sample income statement.

Example

Citigroup

In the example of Citigroup, Inc. 2003:

• Revenues: 94,713
• Income from continuing operations: 26,333 (revenue less "interest expense", "operating expenses" and "benefits, claims and credit losses")

 income / net revenue 26,333/77,442=0.34, the operating margin is 34%. 

Without "benefits, claims and credit losses":

• Revenues, net of interest expense: 77,442
• Income from continuing operations: 38,274 (26,333+11,941) (77,442-39,168)

 (net revenue - operating expenses) / net revenue 38,274/77,442=0.49, the operating margin is 49%. 

See also

• Efficiency ratio
• Profit margin

External links

• Operating Margin (http://www.investopedia.com/terms/o/operatingmargin.asp)

Example

• C: Income Statement for CITIGROUP INC - Yahoo! Finance (http://finance.yahoo.com/q/is?s=C&annual)
• Citigroup - Annual Reports & Proxy Statements (http://www.citigroup.com/citigroup/fin/ar.htm)