Operating profit margin

So kiddo, do you remember when we have dolls you play with and you sell them at the school fair? Operating profit margin is kind of like that doll selling game.

Let's say you spent $10 on making those dolls. You sell each doll for $15. After you sold all of your dolls, you look at the money you made, which is $30.

Now, you need to subtract the amount you spent to make the dolls, which is $10.

If you subtract $10 from the $30 that you made, you get $20. This $20 is called your profit.

Operating profit margin is kind of the same way businesses calculate their profit. They look at how much they spent to operate their business, like paying for rent and workers, and then they subtract that amount from the money they made.

And, just like how you divide your profit by the amount you spent to make your dolls, businesses divide their profit by their revenue (money they made). This number is shown as a percent, and it tells you how much profit the business made for every dollar it earned.

So, operating profit margin is just a fancy way of saying how much money a business makes after paying for all its expenses.