Operating margin
The ratio of operating profit (EBIT) to revenue, expressed as a percentage. It measures the profitability of core operations before interest and tax and is the most widely used sector comparison metric.
In practice
Target operating margins vary sharply by sector: food retail 1 to 3 percent, IT services 10 to 20 percent, mature SaaS 15 to 35 percent, franchise network head 25 to 50 percent. A continuously declining operating margin over three consecutive years — even if it remains positive — signals structural competitiveness erosion. The three levers for improvement are raising prices, reducing direct costs, and improving productivity.