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', CSCO's operating profit margin was 27.5%, highlighting profit earned from core business operations. Industry average for Computer Communications Equipment in '2021' stood at -19.7%.
• In '2022', CSCO's operating profit margin was 27.1%, highlighting profit earned from core business operations. The decline from '2021' may indicate some operational or financial challenges. Industry average for Computer Communications Equipment in '2022' stood at -31.2%. Industry average declined by 11.5% from previous year.
• In '2023', CSCO's operating profit margin was 27.3%, highlighting profit earned from core business operations. The increase since '2022' reflects strengthening financial performance. Industry average for Computer Communications Equipment in '2023' stood at -33.1%. Industry average declined by 1.9% from previous year.
• In '2024', CSCO's operating profit margin was 24.1%, highlighting profit earned from core business operations. The decline from '2023' may indicate some operational or financial challenges. Industry average for Computer Communications Equipment in '2024' stood at -25.1%. Industry average increased by 8.0% compared to previous year.
Overall, CSCO's operating profit margin has consistently declined during the past 4 years.

Formula: Operating Profit Margin = Operating Income / Revenue

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