How Do You Spell OPERATING MARGIN?

Pronunciation: [ˈɒpəɹˌe͡ɪtɪŋ mˈɑːd͡ʒɪn] (IPA)

The spelling of the word "operating margin" is straightforward, but its IPA phonetic transcription can be a bit tricky. It is pronounced as /ˈɒpəreɪtɪŋ ˈmɑːdʒɪn/ (oh-puh-rey-ting mahr-jin). The first syllable of the word is emphasized, and the "a" sound in the second syllable is pronounced like "ah" as in the word "father." The "g" in the second syllable is not pronounced, making it sound like "jin." The word refers to the ratio between an organization's operating income and its net sales.

OPERATING MARGIN Meaning and Definition

1. Operating margin is a financial metric that indicates how efficiently a company is able to generate profit from its core operations. It is a measure of a company's profitability and represents the percentage of revenue that remains after deducting the costs directly associated with producing and delivering a product or service.

   Operating margin is calculated by dividing the operating income (also known as operating profit or earnings before interest and taxes - EBIT) by the total revenue, and then multiplying the result by 100. The operating income is derived by subtracting all the variable and fixed expenses directly related to the production of goods or provision of services from the total revenue.

   This metric provides valuable insights into a company's ability to generate profit from its core activities. A high operating margin is generally considered favorable as it suggests that the company is efficiently managing its costs and generating solid profit. Conversely, a low operating margin may indicate that the company is unable to effectively control its expenses or is operating in a highly competitive industry with low-profit margins.

   Operating margins can vary across industries, with some sectors, such as technology, typically having higher margins compared to industries like retail or manufacturing. Comparing a company's operating margin with industry standards or competitors can provide a useful benchmark for evaluating its performance.

Common Misspellings for OPERATING MARGIN

• iperating margin
• kperating margin
• lperating margin
• pperating margin
• 0perating margin
• 9perating margin
• ooerating margin
• olerating margin
• o-erating margin
• o0erating margin
• opwrating margin
• opsrating margin
• opdrating margin
• oprrating margin
• op4rating margin
• op3rating margin
• opeeating margin
• opedating margin
• opefating margin
• opetating margin

Etymology of OPERATING MARGIN

The word "operating margin" originated from the merger of two terms: "operating" and "margin".

The term "operating" comes from the Latin word "operari", which means "to work" or "to act". In a business context, "operating" refers to the activities and processes involved in running a company or organization.

"Margin" has its roots in the Latin word "margo", which means "edge" or "border". In financial and accounting terms, a "margin" represents the difference between two values or amounts.

When these two terms are combined, "operating margin" refers to the percentage or amount by which a company's revenue or income exceeds its operating expenses. It is a financial metric used to evaluate a company's profitability and efficiency in its core operations.