ARYx Therapeutics (ARYx Therapeutics) Operating Income : $-16.73 Mil (TTM As of Sep. 2010)

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What is ARYx Therapeutics Operating Income?

ARYx Therapeutics's Operating Income for the three months ended in Sep. 2010 was $-2.15 Mil. Its Operating Income for the trailing twelve months (TTM) ended in Sep. 2010 was $-16.73 Mil.

Operating Margin % is calculated as Operating Income divided by its Revenue. ARYx Therapeutics's Operating Income for the three months ended in Sep. 2010 was $-2.15 Mil. ARYx Therapeutics's Revenue for the three months ended in Sep. 2010 was $0.00 Mil. Therefore, ARYx Therapeutics's Operating Margin % for the quarter that ended in Sep. 2010 was %.

ARYx Therapeutics's 5-Year average Growth Rate for Operating Margin % was 0.00% per year.

Operating Income or EBIT is linked to Return on Capital for both regular definition and Joel Greenblatt's definition. ARYx Therapeutics's annualized ROC % for the quarter that ended in Sep. 2010 was -112.28%. ARYx Therapeutics's annualized ROC (Joel Greenblatt) % for the quarter that ended in Sep. 2010 was -511.63%.

ARYx Therapeutics Operating Income Historical Data

The historical data trend for ARYx Therapeutics's Operating Income can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

ARYx Therapeutics Operating Income Chart

ARYx Therapeutics Annual Data

Trend

Dec03

Dec04

Dec05

Dec06

Dec07

Dec08

Dec09

Operating Income

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-28.17

-28.29

-28.80

-30.42

-31.24

ARYx Therapeutics Quarterly Data
	Dec05	Mar06	Jun06	Sep06	Dec06	Mar07	Jun07	Sep07	Dec07	Mar08	Jun08	Sep08	Dec08	Mar09	Jun09	Sep09	Dec09	Mar10	Jun10	Sep10
Operating Income	Get a 7-Day Free Trial															-7.63	-5.32	-6.02	-3.24	-2.15

ARYx Therapeutics Operating Income Calculation

Operating Income, is the profit a company earned through operations. All expenses, including cash expenses such as cost of goods sold (COGS), research & development, wages, and non-cash expenses, such as depreciation, depletion and amortization, have been deducted from the sales.

Operating Income for the trailing twelve months (TTM) ended in Sep. 2010 adds up the quarterly data reported by the company within the most recent 12 months, which was $-16.73 Mil.

ARYx Therapeutics (OTCPK:ARYX) Operating Income Explanation

1. Operating Income or EBIT is linked to Return on Capital for both regular definition and Joel Greenblatt's definition.

ARYx Therapeutics's annualized ROC % for the quarter that ended in Sep. 2010 is calculated as:

	ROC % (Q: Sep. 2010 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Jun. 2010 )	+	Invested Capital (Q: Sep. 2010 ))	/ count )
=	-8.58 * ( 1 - % )	/	( (6.168	+	9.115)	/ 2 )
=	-8.58	/	7.6415
=	-112.28 %

where

	Invested Capital		(Q: Jun. 2010 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	5.018	-	2.817	-	( 1.404	-	max(0, 6.154	-	2.187	+	1.404	))
=	6.168

	Invested Capital		(Q: Sep. 2010 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	5.972	-	0.964	-	( 2.954	-	max(0, 7.789	-	3.682	+	2.954	))
=	9.115

Note: The Operating Income data used here is four times the quarterly (Sep. 2010) data.

2. Joel Greenblatt's definition of Return on Capital:

ARYx Therapeutics's annualized ROC (Joel Greenblatt) % for the quarter that ended in Sep. 2010 is calculated as:

	ROC (Joel Greenblatt) %		(Q: Sep. 2010 )
=	EBIT	/	Average of (Net fixed Assets	+	Net Working Capital)
=	EBIT	/	Average of (Property, Plant and Equipment	+	Net Working Capital)
			Q: Jun. 2010		Q: Sep. 2010
=	EBIT	/	( ( (Property, Plant and Equipment + Net Working Capital)	+	(Property, Plant and Equipment + Net Working Capital) )	/	count )
=	-8.58	/	( ( (1.776 + max(-2.034, 0))	+	(1.578 + max(-0.236, 0)) )	/	2 )
=	-8.58	/	( ( 1.776	+	1.578 )	/	2 )
=	-8.58	/	1.677
=	-511.63 %

where Working Capital is:

	Working Capital		(Q: Jun. 2010 )
=	(Accounts Receivable	+	Total Inventories	+	Other Current Assets)	-	(Accounts Payable & Accrued Expense	+	Defer. Rev.	+	Other Current Liabilities)
=	(0	+	0	+	0.783)	-	(2.817	+	0	+	0)
=	-2.034

	Working Capital		(Q: Sep. 2010 )
=	(Accounts Receivable	+	Total Inventories	+	Other Current Assets)	-	(Accounts Payable & Accrued Expense	+	Defer. Rev.	+	Other Current Liabilities)
=	(0	+	0	+	0.728)	-	(0.964	+	0	+	0)
=	-0.236

When net working capital is negative, 0 is used.

Note: The EBIT data used here is four times the quarterly (Sep. 2010) EBIT data.

3. Operating Income is also linked to Operating Margin %:

ARYx Therapeutics's Operating Margin % for the quarter that ended in Sep. 2010 is calculated as:

Operating Margin %	=	Operating Income (Q: Sep. 2010 )	/	Revenue (Q: Sep. 2010 )
	=	-2.145	/	0
	=	%

4. Please click Growth Rate Calculation Example (GuruFocus) to see how GuruFocus calculates Wal-Mart Stores Inc (WMT)'s revenue growth rate. You can apply the same method to get the Operating Income growth rate using Operating Income per share data.

Be Aware

Compared with a company's EBITDA margin, Operating Margin can be manipulated by adjusting the rate of depreciation, depletion and amortization (DDA).

If a company is facing competition, its Operating Margin may decline. Often the Operating Margin declines well before the company's revenue or even profit decline. Therefore, Operating Margin is a very important indicator of whether the company is facing problems.

For instance, by 2012, Nokia (NOK)'s problems were well known and its stock had lost more than 90% of its market value since 2007. But Nokia's Operating Margin had already been in decline since 2002, although its earnings per share were still rising. Investors who paid attention to Operating Margin would have avoided this huge loss. The same can be said for Research-in-Motion (RIMM).

Therefore, Operating Margin is a very important screening filter for GuruFocus. GuruFocus's Buffett-Munger screener requires that the profit margin is either consistent or expanding. The Model Portfolio of the Buffett-Munger screener has outperformed the market every year since inception in 2009.

ARYx Therapeutics Operating Income Related Terms

Thank you for viewing the detailed overview of ARYx Therapeutics's Operating Income provided by GuruFocus.com. Please click on the following links to see related term pages.

ARYx Therapeutics (ARYx Therapeutics) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Healthcare » Drug Manufacturers » ARYx Therapeutics Inc (OTCPK:ARYX) » Definitions » Operating Income

Comparable Companies

Traded in Other Exchanges

N/A

Address

6300 Dumbarton Circle, Fremont, CA, USA, 94555

Website

http://www.aryx.com

ARYx Therapeutics Inc is a biopharmaceutical company focused on developing a portfolio of internally discovered product candidates designed to eliminate known safety issues associated with well-established, commercially successful drugs.

Executives

Newhall Charles W Iii	10 percent owner	1119 ST PAUL ST, BALTIMORE MD 21202
C Richard Kramlich	10 percent owner	1954 GREENSPRING DRIVE, SUITE 600, TIMONIUM MD 21093
Ryan D Drant	10 percent owner	1119 ST PAUL STREET, BALTIMORE MD 21202
Krishna Kittu Kolluri	10 percent owner
New Enterprise Associates 12, Limited Partnership	10 percent owner	1119 ST. PAUL STREET, BALTIMORE MD 21202
Nea Partners 12, Limited Partnership	10 percent owner	1119 ST. PAUL STREET, BALTIMORE MD 21202
Nea 12 Gp, Llc	10 percent owner	1119 ST. PAUL STREET, BALTIMORE MD 21202
Mark W Perry	10 percent owner
Patrick J Kerins	10 percent owner
Forest Baskett	10 percent owner
Growth Equity Opportunities Fund, Llc	10 percent owner	1119 ST. PAUL STREET, BALTIMORE MD 21202
Peter J Barris	10 percent owner	1119 ST PAUL STREET, BALTIMORE MD 21202
M James Barrett	10 percent owner	1119 ST PAUL STREET, BALTIMORE MD 21202
Scott D Sandell	10 percent owner
Nicholas Galakatos	10 percent owner	THE JOHN HANCOCK TOWER, 200 CLARENDON STREET, 54TH FLOOR, BOSTON MA 02116

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