Name: Operating Profit Margin

Definition: Operating profit margin focuses on profits from the company’s core business — before interest payments and taxes. It reflects how well the business manages operating costs relative to sales. Strong operating margins show efficient day-to-day operations. Shrinking margins may reveal rising overhead, pricing weakness, or declining efficiency.

Interpretation:
• In '2021', AA's operating profit margin was 16.8%, highlighting profit earned from core business operations. Industry average for Aluminum in '2021' stood at 9.9%.
• In '2022', AA's operating profit margin was 10.7%, highlighting profit earned from core business operations. The decline from '2021' may indicate some operational or financial challenges. Industry average for Aluminum in '2022' stood at 5.5%. Industry average declined by 4.4% from previous year.
• In '2023', AA's operating profit margin was -2.1%, highlighting profit earned from core business operations. The decline from '2022' may indicate some operational or financial challenges. Industry average for Aluminum in '2023' stood at -0.3%. Industry average declined by 5.9% from previous year.
• In '2024', AA's operating profit margin was 7.0%, highlighting profit earned from core business operations. The increase since '2023' reflects strengthening financial performance. Industry average for Aluminum in '2024' stood at 6.2%. Industry average increased by 6.6% compared to previous year.
Overall, AA's operating profit margin has been volatile but showed a downward trend over the past 4 years.

Formula: Operating Profit Margin = Operating Income / Revenue

Good Range: Often 10%-30% depending on business model.