Operating Margin

Definition

Profit after COGS AND operating expenses, as a share of revenue — is the whole operation sustainable?

Formula

Operating profit = Revenue - COGS - OPEX
Operating margin = Operating profit / Revenue

Worked Example

Revenue $88,000, total operating costs $95,000:

Operating profit = -$7,000
Operating margin = -8.0%

Interpretation & Pitfalls

Negative operating margin is normal for growth-stage companies — IF unit economics are positive and Rule of 40 holds.

In TupicFinance

The P&L view assembles operating margin from categorized cost items per project and company-wide.