OPERATING MARGIN
  Definition
  
EBITDA / Net sales (in %)

  Calculation Rules
  
 Operating Margin199519961997199819992000
 Automobile-1,0%1.4%2.6%1.8%2.8%2.2%
 Food & Drug5.8%6,0%6.7%6.5%6.8%6.8%
 Beverage9.6%8.6%9.1%9.2%9.7%10.5%
 Chemical5.5%5.1%5.2%5.9%5.8%6.4%
 Retail2.9%3,0%3,0%3.1%3.2%3.3%
 Construction & Building Materials6.6%6.6%6.9%6.9%7.3%7.4%
 Electronic & Electrical Materials3.6%3.6%4.3%4.8%5.1%5.7%
 Media10.9%10.9%10.7%10.9%10.3%11,0%
 Telecom11.9%11.1%12.1%12.5%13.8%14.4%
 Pharmaceutical13,0%13.6%13.9%14.5%15.2%15.6%
 Technology5.2%5.6%6.2%5.6%6.1%6.6%
 Steel6.5%4.2%3.5%4.8%1.4%2.6%
Source BNP Paribas 2000 (Vernimmen Dalloz Edition)

  Comment
  
This ratio measures operating efficiency, including price strategy, wage policy, control on overhead costs... Like all such measures, this one varies widely by industry : it should always be analysed within the particular context of a given business.
Another ratio measuring operating efficiency is EBITDA / Net sales, which excludes the impact of Depreciation and Amortization.

  Reference
  
Net sales
EBIT

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