Operating Profit Margin (OPM) is the percentage of revenue that remains after subtracting the cost of goods sold from the revenue generated by your product or service.
For example, if your company generates $100,000 in revenue and $50,000 in cost of goods sold, your OPM is 50%.
Operating profit margin is a great metric to use when determining whether or not your company is profitable. If your company is not profitable, you should look closely at your operating expenses and determine if they are necessary. If they are, you should look for ways to reduce them.
For example, if your company has a high OPM, you may be able to reduce your operating expenses by outsourcing certain functions or by hiring less expensive employees.