Operating margin is operating income divided by revenue. If the operating margin is 24.6%, operating income must be $320,000. If operating income were $224,000, that would reduce operating margin to 17.2%.
Schuylaars Sesh - The New Wedge Issue for 2014 Mid-Terms..
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Operating margin is operating income divided by revenue. If the operating margin is 24.6%, operating income must be $320,000. If operating income were $224,000, that would reduce operating margin to 17.2%.
ChesusRice
Well-Known Member
Beenthere will cite a source for his franchise owners making 50k a year any day now.
ginwilly
Well-Known Member
The actual source you posted said that while many net profits were unreported they still showed the average of some franchises. Some were as low as 27K. I would be willing to place a bet with you that some of the unreported actually had losses. Some franchises do make bank though, that's inarguable.
I think you are forgetting the gross margin, I believe it was 70%
The gross margin is the percentage of gross profit from your gross sales.
Revenue is your top line, not gross sales.
nontheist
Well-Known Member
Use the equation. Operating margin = operating income / revenue. 24.6% = x / $1.3 million. Operating income must be $320,000.
Sorry bro, I feel it's the wrong equation.
Revenue is top line (gross profit)
There you have it.Net profit (operating income) divided by revenue (gross profit) not gross sales
It's the operating margin equation. Do you have some other magical operating margin equation that uses different parameters?
http://www.investopedia.com/terms/o/operatingmargin.asp.
http://accountingexplained.com/financial/ratios/operating-margin.
http://en.wikipedia.org/wiki/Operating_margin.
Same equation every time.
Revenue is not gross profit.
UncleBuck
Well-Known Member
UncleBuck
Well-Known Member
i'm just waiting on a single example. that's all.
What is there to argue? You should have admitted you were wrong when you looked at the equation. Instead you tried to redefine revenue as gross profit.
I did six years of accounting, so I am not impressed.
The op was about the federal government raising the minimum wage to $15hr and how most if not all franchises could not sustain it.
Do you disagree, or not?
OK tokeprep, OK.
UncleBuck
Well-Known Member
do you have a single example showing they haven't been able to in the past?
UncleBuck
Well-Known Member
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