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Operating Profit




Operating :
This means we only include operational expenses in this calculation. Specifically, we exclude all costs associated with financing activities, including interest payments from debt and amortization of intangibles from acquisitions. We also exclude tax expenses from this metric, making this a "pre-tax" measure.
Profit :
This means we are calculating profits, i.e. what's left after subtracting expenses from sales.
Margin :
This means we are calculating operating profit as a percentage of sales.