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', PAYX's operating profit margin was 36.0%, highlighting profit earned from core business operations. Industry average for Diversified Commercial Services in '2021' stood at 9.7%.
• In '2022', PAYX's operating profit margin was 39.9%, highlighting profit earned from core business operations. The increase since '2021' reflects strengthening financial performance. Industry average for Diversified Commercial Services in '2022' stood at 8.3%. Industry average declined by 1.4% from previous year.
• In '2023', PAYX's operating profit margin was 40.6%, highlighting profit earned from core business operations. The increase since '2022' reflects strengthening financial performance. Industry average for Diversified Commercial Services in '2023' stood at 7.4%. Industry average declined by 0.9% from previous year.
• In '2024', PAYX's operating profit margin was 41.2%, highlighting profit earned from core business operations. The increase since '2023' reflects strengthening financial performance. Industry average for Diversified Commercial Services in '2024' stood at -18.7%. Industry average declined by 26.1% from previous year.
Overall, PAYX's operating profit margin has steadily improved over the past 4 years.

Formula: Operating Profit Margin = Operating Income / Revenue

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