Now that tax season is over, it’s time to turn your attention back to getting your business in good financial shape. If you’re not already familiar with how to calculate your operating profit margin, here’s what to do.
An income statement measures a company’s financial performance. Towards the end of an income statement, the operating income will be listed. To determine the margin as a percentage, take the operating income before taxes and divide it by sales.
Compare this percentage to prior periods to create a context in which to interpret how you’re currently doing. You can also compare it to financial forecasts for your company, as well as to how other companies in the industry are doing.