Calculating operating profit margin, also known as the operating income margin ratio, gives you an indication of the profitability of a company’s core operations. It is calculated by dividing the company’s operating income by its total revenue, and is expressed as a percentage. This gives you an idea of how much money a company makes from selling its goods and services, after deducting all expenses that are not related to selling these products. By understanding this ratio, you can get an insight into which areas of a business are contributing to profits, as well as whether managing costs is effective.