"Operating margin" is the ratio of operating income divided by sales revenue, expressed as a percentage. One time gains and losses, interest expenses, interest income, other income, and taxes are excluded from the operating margin. For example, if the operating income is $100,000 and the sales revenue is $300,000, then the operating margin is 33%. That means that the company makes 33 cents (excluding gains, losses, interest and taxes) for every dollar of sales. The higher the operating margin, the better for the company.

This is also referred to as the "net profit margin."