A magnetic sensor arrangement for determining an operating state of a magnetic sensor is provided. The magnetic sensor arrangement comprises a magnetic sensor being adapted to provide an output voltage being modulated by a movement of an encoder component, the encoder component providing a periodic changing magnetic field being generated due to a relative movement of the encoder component in relation to the magnetic sensor arrangement, and a sensor control unit being coupled to the magnetic sensor. The sensor control unit is adapted to receive the output voltage signal of the magnetic sensor, wherein the output voltage signal is a function of time, to change the reference quantity from time to rotational angle by mapping the output voltage signal to a converted signal being a function of rotational angle such that spectral signal power portions of the converted signal are associated with orders of the encoder rotational speed, to determine a first signal power being indicative for a first portion of orders of the encoder rotational speed, to determine a second signal power being indicative for a second portion of orders of the encoder rotational speed, to determine a ratio of the first signal power and the second signal power, the ratio being indicative for a signal distortion of the output voltage signal, and to determine the operating state of the magnetic sensor based on the determined ratio. Mounting errors, e.g. incorrect air gap distance between sensor and encoder or wrong orientation of the sensor can be identified in this way.