Operating Margin Equation is a crucial profitability metric which helps evaluate how efficiently a business generates profits out of its overall operations. It is calculated by dividing the operating income of a company by its total sales during a certain period. The operating margin equation can be represented as Operating Income/Revenue x 100, and it is expressed in percentages. To get an accurate understanding of the performance of a business over time, it is recommended to use the operating margin equation for both short-term and long-term periods. Knowing the operating margin of your business can help you identify areas where you can optimize costs, increase efficiency and ultimately ensure sustainable profitability.