Plain-language questions
Ask for operating margin (EBIT margin) per month, customer or product in the SQL Explorer with AI. The AI writes the SQL, you see the query and run it yourself; the AI only receives metadata.
KPI · Finance
Operating margin (EBIT margin): formula and example.
Operating margin, also called EBIT margin, is operating profit before interest and tax divided by revenue. Unlike EBITDA margin it includes depreciation, so the cost of machinery, buildings and software is reflected in the result. It shows how profitable operations are, regardless of financing and tax.
Operating margin (EBIT margin) formula
Operating profit (EBIT) ÷ revenue × 100%, where EBIT = EBITDA − depreciation and amortisation
Worked example
In 2025 Acme Groothandel had EBITDA of €960,000 and €240,000 of depreciation. Operating profit is €960,000 − €240,000 = €720,000. With revenue of €12,000,000, operating margin is €720,000 ÷ €12,000,000 × 100% = 6%.
Fictitious figures for Acme Groothandel, a sample wholesaler.
How to read this KPI
A higher operating margin means more is left after all operating costs, including depreciation, to pay interest, tax and investment. Compare it with previous years and with budget. The gap with EBITDA margin shows how heavily depreciation weighs; in asset-heavy businesses that gap is larger.
Pitfalls with operating margin (EBIT margin)
- Including interest income or currency gains in operating profit, when they belong outside the operating margin.
- Changing depreciation periods without saying so, which shifts the margin while operations stay the same.
- Not showing impairments or one-off restructuring costs separately.
SQL & DAX
Calculating operating margin (EBIT margin) in SQL and DAX
Two examples on a fictitious data warehouse for Acme Groothandel: a PostgreSQL query and a measure for a Power BI model. Adjust table and column names to your own model.
SELECT date_trunc('year', entry_date)::date AS year,
SUM(amount) FILTER (WHERE account_group = 'revenue') AS revenue,
SUM(CASE WHEN account_group = 'revenue' THEN amount ELSE -amount END) AS operating_profit,
ROUND(100.0 * SUM(CASE WHEN account_group = 'revenue' THEN amount ELSE -amount END)
/ NULLIF(SUM(amount) FILTER (WHERE account_group = 'revenue'), 0), 1) AS operating_margin_pct
FROM gl_entries
WHERE account_group IN ('revenue', 'cogs', 'personnel', 'other_opex', 'depreciation')
GROUP BY 1
ORDER BY 1;EBIT =
CALCULATE(SUM(GL[Amount]), GL[AccountGroup] = "revenue")
- CALCULATE(SUM(GL[Amount]), GL[AccountGroup] IN {"cogs", "personnel", "other_opex", "depreciation"})
Operating Margin % = DIVIDE([EBIT], CALCULATE(SUM(GL[Amount]), GL[AccountGroup] = "revenue"))In ENABLE
Tracking this KPI in ENABLE
In your Power BI dashboard
Define the KPI as a measure in your Power BI model and show it in the portal, with "Last refreshed" next to it. Access profiles and optional row-level security decide who sees which figures.
Custom dashboards (pilot)
Add the KPI as a tile to a custom dashboard, compared with last year. The Dashboard Builder is a pilot and can be switched on per client.
Monthly targets
With the built-in Targets app you set a target for the KPI per month, so you see actuals and target side by side.
FAQ
Frequently asked questions
How do you calculate operating margin?
Divide operating profit before interest and tax (EBIT) by revenue and multiply by 100%. With €720,000 of operating profit on €12,000,000 of revenue, operating margin is 6%. Operating profit appears in the income statement above finance income and costs.
What is the difference between EBIT margin and EBITDA margin?
EBIT margin also deducts depreciation and amortisation, EBITDA margin does not. EBIT margin is therefore always equal to or lower than EBITDA margin, and the gap shows what the wear of assets costs.
Is operating margin the same as net profit margin?
No, operating margin looks at profit before interest and tax, net profit margin at profit after them. A heavily indebted company can have a reasonable operating margin and still a low net profit margin because of interest costs.
Further reading
- KPI libraryFinancial KPIs: formulas and examplesFinancial KPIs show how profitable, liquid and solvent an organisation is. The data usually comes from your accounting package or ERP: general ledger entries, invoices and open items.Read more
- ResourcesHow to build a KPI dashboard: steps and examplesA KPI dashboard is an overview of the key figures you use to steer towards your goals, such as revenue, margin, on-time delivery or absenteeism. A good KPI dashboard does not start with the software, but with the decisions it needs to support. You then choose a limited number of KPIs, define them, sketch the dashboard and only then build it.Read more
- SolutionPower BI dashboard portal: share dashboards securelyShare your Power BI dashboards securely in your own portal, with role-based access.Read more
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