What is the formula for calculating the operating margin ratio?

The formula for calculating the operating margin ratio is designated to measure a company's operating efficiency by showing the percentage of revenue that remains after covering operating expenses. The operating margin ratio is calculated by dividing operating income by total revenue.

This ratio is significant because it provides insight into how much profit a company makes from its operations for every dollar of revenue generated. It highlights the effectiveness of a company in managing its operations, excluding costs related to financing and taxes. A higher operating margin indicates a company is more efficient at turning sales into actual profit, which can depict a healthier business model.

The other options pertain to different financial metrics that do not correspond to the operating margin ratio. For instance, using total assets or liabilities does not directly reflect operational performance; hence those ratios would not provide a clear measure of operating efficiency.