Posted by forex at 4:51 AM
Read our previous post
1. Download the annual report for the company. The annual report usually is posted in the investor relations section of the company's website. If it is not posted, call the contact listed for the company and request an annual report. If you are calculating the ratio for your own company, you will need to access numbers from the income statement.
2. Determine the sales, cost of goods sold and operating expenses associated with making sales. These are standard line items on the income statement.
3. Subtract the cost of goods sold from sales. This is the gross profit.
4. Subtract operating expenses from gross profit. This is the operating profit.
5. Divide the operating profit by sales for the operating margin. This number can be either negative or positive, depending on the amount of expenses. If the number is negative, the company has suffered an operating loss. If the number is positive, the company has realized a gain.