Could someone explian the difference? Thanks!
Get Active in Our Amazing Community of Over 451,000 Peers!
Difference btw operating margin and gross margin
Overview of answers
-
Upvotes
-
Date ascending
-
Date descending
Hi,
Gross margin is margin when you take the revenue and deduct the direct costs associated with the product such as cost of goods sold. This is the gross margin in absolute dollars, if you want a percentage divide by the revenue)
The operating margin is if you take the revenue, deduct the direct costs but also all the indirect costs (overhead, rent, etc.).
Here is an article with a more detailed explanation:
Hope this helps.
Hi there,
Gross Margin: (Revenue-COGS) / Revenue
Operating Margin: (Revenue-COGS-OPEX) / Revenue
*OPEX (Operating expenses) are expenses like utilities, rent, marketing overhead etc.
Cheers
Serhat
Related Products
Break Into Consulting - Strategy Consulting Firm's All-In-One by Alexandre
- Created by 2 BCG consultants
- Covers most strategy consulting firms
- Get you to the backstage of the strategy world
Break Into Consulting - Industry Overviews by Alexandre
- Created by 2 BCG consultants
- 15+ industries covered
- Practical tips to master any industry
Break Into Consulting - Frameworks I wish I knew by Alexandre
- Created by 2 BCG consultants
- Covers most interview cases
- Practical tips to crack the case
BCG Online Case Combo: Software Simulation by Francesco
- Practice with 6 Chatbot Tests (Casey Style), including 4 Software Simulations
- Test Yourself with 4 Live One-Way Video Interviews (with AI Generated Tips)
- Receive for Free the BCG Online Case Secrets Guide
BCG Online Case Secrets by Francesco
- Master the 5 Types of Questions Asked by the Chatbot
- Discover the Exact Steps to Prepare for the 1-Minute Video Assessment
- Prepare in Advance by Solving 2 Complete Chatbot Cases
BCG Potential Test #2 by Gaurav
- BCG Potential Test with 23 questions about "World Electrification Case"
- Created by ex-MBB interviewer Gaurav
- Format and style for a real test experience
BCG Potential Test #1 by Francesco
- BCG Potential Test with 23 questions about "CoverCell Case"
- Created by ex-BCG consultant Francesco
- Format and style for a real test experience
Prep Guide for McKinsey PST by PrepLounge
- McKinsey PST preparation guide incl. 13 pages of useful tips
- Created by ex-McKinsey consultants
- Detailed information on test structure, question types & core skills
McKinsey PST #2 by Gaurav
- PST with 26 questions about "WeKlin Case"
- Created by ex-McKinsey consultants
- Industries: Retail, energy, franchise
McKinsey PST #1 by PrepLounge
- PST with 26 questions about "FloraFashion Case"
- Created by ex-McKinsey consultants
- Industries: Retail, energy, franchise
Related Articles
Related Cases
Related Case Interview Basics article(s)
BCG Online Case
Get to know the BCG Online Case and learn how to approach this specific Boston Consulting Group Test when you want to start your careere in Consulting.
Bain Sova Test
The Bain Sova Test is an aptitude test for applicants to Bain & Company. The test consists of 4 areas and is used at Bain for job interviews in consulting.