The formula for calculating operating profit is straightforward: Operating Profit = Revenue − Operating Expenses. Operating Profit = £500,000 − £380,000 = £120,000. Operating Profit Margin = (Operating Profit / Revenue) ×100. Operating Profit Margin = (£120,000 / £500,000) ×100 = 24%
Profit = total revenue – total costs. This is a simple and yet very important formula.