|
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.
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