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Operating Profit Percentage

April 13, 2006

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The operating profit percentage can be calculated using the following formula, with figures taken from your income statement:

This ratio is designed to give you an accurate idea of how much money you're making on your primary business operations. It shows the percentage of each sales dollar remaining after all normal costs of operations. By looking at this ratio over time, you can get a fix on whether your overall costs are trending up or down.

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