Operating profit margin (TTM)
factor.formula
Operating profit margin (TTM):
The formula calculates the trailing twelve month operating margin where:
- :
Refers to the total operating profit accumulated in the past 12 months. Operating profit is the profit of an enterprise after deducting operating costs, business taxes and surcharges, sales expenses, administrative expenses, research and development expenses, and financial expenses. It reflects the profitability of the enterprise's main business and is the core indicator for measuring the profitability of an enterprise's operating activities.
- :
Refers to the total operating income accumulated in the past 12 months, which is the income obtained by the enterprise from its main business such as selling goods and providing services. It is the denominator for calculating the operating profit margin and represents the operating scale of the enterprise in a certain period of time.
factor.explanation
Compared with gross profit margin, TTM more accurately reflects the profitability of a company's core business, excluding the impact of operating expenses and other factors. It not only measures the profitability of a company, but also reflects the management level of the management in terms of cost control and expense management. This indicator is an important part of the DuPont analysis system. It can deeply analyze the source of a company's profitability and can be compared with other companies in the same industry, so as to more comprehensively evaluate the company's operating conditions and competitive advantages. The higher the operating profit margin, the stronger the company's operating efficiency and profitability.