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OPP Calculation |
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Operating Profit Percentage |
Determining return from standard operations: Summary and Calculation of OPP. Abstract |
Calculation of the Operating Profit Percentage is straightforward: subtract the costs of goods sold, as well as all sales, general, and administrative expenses, from sales. Divide the result by sales. To obtain a percentage that is related strictly to operational results, be sure to exclude interest income and expense from the calculation, since these items are related to a company's financing decisions rather than its operational characteristics.
Expense totals used in the
Operating Profit Percentage ratio should exclude extraordinary
transactions, as well as asset dispositions, since they do
not relate to continuing operations. Compare with Operating Profit Percentage: Gross Profit Percentage |
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