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Operating Margins

fi-le.net

11–20 of 130 posts

Re: Operating Margins

#11
post #9

> Divide a company's income by its revenue If I'm a person who believes income is the same thing as revenue, how would you explain this division to me in a way I'd understand? Or does "income" in this case mean "profit"?

The next line makes it clear:

> For some volume of sales that comes into the business, it gives an idea of what percentage is left as cash in the end.

Re: Operating Margins

#12
post #9

> Divide a company's income by its revenue If I'm a person who believes income is the same thing as revenue, how would you explain this division to me in a way I'd understand? Or does "income" in this case mean "profit"?

Income is closer to profit than you're thinking.

There is gross income, which is roughly sales (revenue) minus the direct costs of those sales. There is net income, which is the money left over after also accounting for other costs, like fixed overheads and marketing.

Re: Operating Margins

#13
post #9

> Divide a company's income by its revenue If I'm a person who believes income is the same thing as revenue, how would you explain this division to me in a way I'd understand? Or does "income" in this case mean "profit"?

I stumbled over this sentence in the same way. And drew the same conclusion: the author uses "income" to mean "profit"

Re: Operating Margins

#14
post #6

This is an excellent article, but the graph is unreadable on mobile even with a relatively large screen.

Also, at the end of the article:

    > Appendix

    > The by-category margins are repeated in this table.
It's basically the same data in a more mobile-friendly table.

Re: Operating Margins

#15
I found the per calculation highly suspicious, especially the first row:

> Country Median Margin Average Margin Sample Size > South Africa 28.86% 82.37% 7

How can the average be 82% with a median being 28% without having one that is above 100%?

Re: Operating Margins

#16
post #9

> Divide a company's income by its revenue If I'm a person who believes income is the same thing as revenue, how would you explain this division to me in a way I'd understand? Or does "income" in this case mean "profit"?

The operative word should have been ‘operating’ income, which is revenue - operating expenses - cost of goods sold

Re: Operating Margins

#17
post #9

> Divide a company's income by its revenue If I'm a person who believes income is the same thing as revenue, how would you explain this division to me in a way I'd understand? Or does "income" in this case mean "profit"?

> Income is a company's total earnings after all expenses and earnings that aren't counted as revenue are deducted.

I found different definitions, but it seems net profit = net income.

Re: Operating Margins

#18
post #13
post #9

> Divide a company's income by its revenue If I'm a person who believes income is the same thing as revenue, how would you explain this division to me in a way I'd understand? Or does "income" in this case mean "profit"?

I stumbled over this sentence in the same way. And drew the same conclusion: the author uses "income" to mean "profit"

That is the standard meaning of that term in business accounting. When you or I work for a salary, we think of income as all the money coming in, but that's because there are no allowable expenses that we get to deduct against that income, so our "revenue as employees" is all "income".

Re: Operating Margins

#19

I like your style - clear, on point, and no attempts to sell me anything. It’s honestly refreshing to read

There is another aspect to this, "Can the margins scale?" https://www.bloomberg.com/opinion/newsletters/2025-11-13/bla...

https://archive.is/EdxHn interesting read.

Re: Operating Margins

#20

I found the per calculation highly suspicious, especially the first row: > Country Median Margin Average Margin Sample Size > South Africa 28.86% 82.37% 7 How can the average be 82% with a median being 28% without having one that is above 100%?

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