September 2012
Intermediate to advanced
376 pages
6h 44m
English
Content preview from Key Performance Indicators (KPI)
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4
Operating profit margin
Strategic perspective
Financial perspective
Key performance question this indicator helps to answer
To what extent are we operating our business efficiently?
Why is this indicator important?
Another profitability measure used in companies is the operating profit margin (or operating margin for short). It can provide insights into a company’s operating efficiency and pricing strategy. By dividing the operating income by revenue it measures the proportion of revenue that remains after deducting the costs of operating the business, including costs for labour, raw material, overhead, depreciation, amortisation, selling, advertising, admin, etc.).
Because operating income includes only the sales revenue from regular ...
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