Operating Margin
Categories: Entrepreneur, Metrics
Key word here: "operating." It's cousin is "gross." Not aesthetically... just financially.
Example
Let's say you sell lemonade for a buck a drink. Your cost per cup is a dime: the water, sugar, the paper cup itself, and the lemon. (Some people count the labor of the dude serving it, but in this futuristic world, you have a decanting robot machine.) Your gross margin here is 90%. But then you have rent, insurance, marketing, some human management, and a bunch of other costs to operate the business. You had pre-tax operating profit of $500 on revenues of $5,000 last month. Your operating margin was 10%.
Remember: Margin is a percentage, not a dollar sign-y number.