EBIT margin (operating margin)
Percentage of sales that turns into operating income (operating margin).
EBIT margin = EBIT ÷ Net revenue
Measures what's left of every $100 of sales once everything needed to operate is paid for: product, staff, overhead and asset depreciation. It's the margin of the BUSINESS, before interest and tax, which is why it lets you compare two companies in the same sector even when one is leveraged and the other isn't.
The absolute level only makes sense within an industry: a supermarket at 4% can be excellent and a software vendor at 20% mediocre. What does read without context is the TREND: a margin narrowing year after year while sales grow usually means growth is being bought with discounts, or with costs that don't scale.
Where to see it on ValuatePad
Year by year, for every company, in the tab Margins.