September 23, 2012
In the spirit of better investing and in celebration of the first Worldwide Invest Better Day coming up on Sept. 25, Motley Fool analysts will be answering user- and reader-submitted questions leading up to the big event. "Ask a Fool" anything, and we'll do our best to help you invest better.
The term "operating margin" refers to the amount of profit you have for each $1 in sales after deducting all expenses other than interest and taxes. In the following video, Fool.com analyst Isaac Pino sheds light on what this means for the everyday investor, both in reading an income statement and in relation to other margins and figures.
Operating margin can be especially useful in evaluating a company such as 3M (NYSE: MMM ) , which manufactures all kinds of products and materials ranging from natural gas vehicle liners to Scotch tape. Looking at operating margins is a good way to break down and examine different components of the business, seeing how they contribute. Watch the following video to learn more.
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