Page Updated on September 20, 2026
Overview
Latest Operating Margin measures the percentage of a company’s revenue that remains as operating income after accounting for the operating costs and expenses of the business.
Operating Margin provides a measure of profitability from a company’s core operations before interest and taxes. A higher positive margin indicates that a greater portion of revenue remains as operating income.
Formula
For example, if a company reports Operating Income of $19.75 billion and Revenue of $87.03 billion, StockZuse calculates an Operating Margin of approximately 22.69%.
How StockZuse Uses the Metric
StockZuse uses Latest Operating Margin as a Business Quality metric within the ZuseScore.
The metric measures how effectively a company converts revenue into operating profit after accounting for the costs and expenses associated with its operations.
Operating Margin complements the other ZuseScore metrics by providing a profitability measure based on operating income rather than revenue growth or cash flow.
ZuseScore Point System
Latest Operating Margin contributes a maximum of 10 points to the ZuseScore.
| Latest Operating Margin | Points |
|---|---|
| 25% or more | 10 / 10 |
| 20% to less than 25% | 9 / 10 |
| 15% to less than 20% | 7 / 10 |
| 10% to less than 15% | 5 / 10 |
| 5% to less than 10% | 3 / 10 |
| 0% to less than 5% | 1 / 10 |
| Below 0% | 0 / 10 |
If matching annual Operating Income and Revenue data are unavailable, the metric is not scored.
Interpretation
A positive Operating Margin indicates that a company generated operating income from its revenue during the period.
Higher margins indicate that a larger percentage of revenue remained after operating costs and expenses. Lower positive margins indicate less operating profit relative to revenue, while a negative margin indicates an operating loss.
Latest Operating Margin should be considered together with the other ZuseScore metrics rather than interpreted in isolation.
Limitations
Operating Margin can vary substantially between industries because companies have different cost structures, competitive environments, pricing models, and capital requirements.
The metric may also be affected by unusual operating expenses, restructuring costs, acquisitions, accounting classifications, and other company-specific circumstances.
For this reason, StockZuse evaluates Operating Margin alongside revenue growth, free cash flow, capital efficiency, financial leverage, and other financial metrics within the ZuseScore.
Data Used
StockZuse uses annual financial data from the same fiscal period:
Operating Income — the company’s reported operating income for the latest annual period.
Revenue — the company’s reported revenue for the corresponding annual period.
These are the same underlying values displayed in the Values Used section of Metric Detail.
Related Methodology
For information about how this metric combines with the other ZuseScore metrics, see ZuseScore Methodology.