I\'ve got a question regarding calculating operating margin. I\'n my notes, I ha

Question

I've got a question regarding calculating operating margin. I'n my notes, I have operating revenue - operating expenses/operating revenue = answer x 100 to get operating margin ratio. If that is correct, I'm wondering if I'm doing this correctly. I have operating revenue at 9,649,000,000 and operating expenses at 9,671,000,000 (those are correct). When I do the problem I get -.22 as the answer. Is that correct? If so, I'm assuming that means the organization is operating at a loss? This is for a healthcare organization. The previous year worked out to 5.74 for the ratio so it looks like their expenses shot way up exceeding revenue. Thanks for the help.

Explanation / Answer

operating margin ratio = operating profit / operating revenue

= (9,649,000,000 - 9,671,000,000) / 9,649,000,000

= - 0.22

the answer that you have worked out is correct . and the company was running in losses due to the negative ratio and also while comparing with the previous year ratio 5.74 shows that organisation has to raise its revenue by reduction of costs

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