The Operating Profit Margin (also referred to as the Operating Income Margin) is a financial metric that measures a company’s operating profits against its total revenue. In other words, it is the percentage of a company’s earning that are generated from its core business operations. To calculate the Operating Profit Margin, one must divide a company’s operating income by its total revenue. A higher Operating Profit Margin indicates that a company is more efficient at generating profits from its operations and has stronger pricing power and cost control. Knowing your company’s Operating Profit Margin can help you understand how well you are managing your costs and pricing strategy.