Operating Profit Margin %

Operating Profit Margin %

Operating Profit (Turnover less cost of sales & admin expenses) X 100

Turnover

 

Benchmark: 6.5%

Operating profit as a percentage of sales less VAT.

Operating profit is the profit generated from trading after selling costs e.g. stocks and administration have been accounted for, but before the profit figure is distorted by non-trading incomes and charges.

This ratio gives a better indication of the retail margin than net profit margin.

The benchmark figure will depend on the trading format, since (obviously) discounters operate on much lower margins than multiple superstores.