Operational Margin definition
Examples of Operational Margin in a sentence
City reserves the right during the Term on an annual basis and within four (4) years after expiration or termination of this Agreement to inspect and examine all Tenant’s books of account, records, cash receipts, and other pertinent data, so City can ascertain Tenant’s Gross Revenue and Operational Margin from operation of the Premises, or any other items set forth in this Agreement.
If Tenant shall fail to deliver such annual audited statement to City within said ninety (90) day period, City shall have the right thereafter to audit or cause an audit to be performed, including without limitation an audit of all records required by Section 6.6 (Capital Improvement Expenditure) and Section 6.10 (Statement of Gross Revenue) herein, as may be necessary to certify the amounts of Operational Margin, Gross Revenue and Annual Rent for such Lease Year.
In addition to all other rent, if Tenant’s Operational Margin exceeds $100,000 in any Lease Year, Tenant shall pay for and perform capital improvements at the Premises in an amount that equals at least $25,000.
Each Lease Year will constitute a separate accounting period for the purpose of computing Base Rent, Percentage Rent, Capital Improvement Expenditure, Operational Margin, Operational Expenditures, and Gross Revenue (all as defined below) for any Lease Year.
The annual audited statements shall include the Gross Revenues, Operational Margin, Annual Rent expenditures, and Capital Improvement Expenditures, in addition to any other items set forth in this Agreement for the preceding Lease Year prepared by an independent Certified Public Accountant.
Operational Margin shall be calculated by subtracting Tenant’s Operational Expenditures (as outlined below) for the Lease Year from Tenant’s Gross Revenue (as defined in Section 6.9) for the Lease Year.