Several factors can influence a company's operating profit margin, including:
Cost of Goods Sold (COGS): Higher COGS can reduce the operating profit margin. Labor Costs: Increased wages and benefits can lower the margin. Economies of Scale: As production increases, the cost per unit may decrease, improving the margin. Pricing Strategy: Premium pricing can increase the margin, while discount pricing can decrease it. Operational Efficiency: Efficient use of resources can boost the margin.