Operating Margin Flashcards
What is the operating margin?
Percentage of revenue that a company generates which can be used to pay the company’s investors
Percentage of revenue that a company generates which can be used to pay the company’s investors
What is the operating margin?
What does a high operating margin mean?
An indicator a company is well managed and has less risk
An indicator a company is well managed and has less risk
What does a high operating margin mean?
How does a company use a healthy profit margin?
To pay its fixed costs, such as interest on debt/taxes
To pay its fixed costs, such as interest on debt/taxes
How does a company use a healthy profit margin?
What is operating income?
Revenue - operating expenses
Revenue - operating expenses
What is operating income?
What can happen if revenue increases in terms of operating margins?
The operating margins of companies that are fixed-cost intensive can increase at a faster rate than variable-cost intensive
The operating margins of companies that are fixed-cost intensive can increase at a faster rate than variable-cost intensive
What can happen if revenue increases in terms of operating margins?
