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', NTES's operating profit margin was 18.7%, highlighting profit earned from core business operations. Industry average for Computer Software: Prepackaged Software in '2021' stood at -36.6%.
• In '2022', NTES's operating profit margin was 20.3%, highlighting profit earned from core business operations. The increase since '2021' reflects strengthening financial performance. Industry average for Computer Software: Prepackaged Software in '2022' stood at -47.3%. Industry average declined by 10.6% from previous year.
• In '2023', NTES's operating profit margin was 26.8%, highlighting profit earned from core business operations. The increase since '2022' reflects strengthening financial performance. Industry average for Computer Software: Prepackaged Software in '2023' stood at -38.1%. Industry average increased by 9.2% compared to previous year.
• In '2024', NTES's operating profit margin was 28.1%, highlighting profit earned from core business operations. The increase since '2023' reflects strengthening financial performance. Industry average for Computer Software: Prepackaged Software in '2024' stood at -24.0%. Industry average increased by 14.1% compared to previous year.
Overall, NTES's operating profit margin has been volatile but showed an upward trend over the past 4 years.

Formula: Operating Profit Margin = Operating Income / Revenue

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