Switch to:
Apollo Education Group Inc (NAS:APOL)
Operating Margin
14.13% (As of May. 2014)

Operating margin is calculated as operating income divided by its revenue. Apollo Education Group Inc's operating income for the three months ended in May. 2014 was $113 Mil. Apollo Education Group Inc's revenue for the three months ended in May. 2014 was $800 Mil. Therefore, Apollo Education Group Inc's operating margin for the quarter that ended in May. 2014 was 14.13%.

Warning Sign:

Apollo Education Group Inc operating margin has been in 5-year decline. The average rate of decline per year is -13.8%.

APOL' s 10-Year Operating Margin Range
Min: 11.61   Max: 30.99
Current: 11.61

11.61
30.99
APOL's Operating Marginis ranked higher than
79% of the 102 Companies
in the Global Education & Training Services industry.

( Industry Median: 7.68 vs. APOL: 11.61 )

Apollo Education Group Inc's 3-Year Average operating margin Growth Rate was -13.80% per year.

Apollo Education Group Inc's operating income for the three months ended in May. 2014 was $113 Mil. Its operating income for the trailing twelve months (TTM) ended in May. 2014 was $325 Mil.


Definition

Operating margin - also known as operating income margin, operating profit margin and return on sales (ROS) - is the ratio of Operating Income divided by net sales or Revenue, usually presented in percent.

Apollo Education Group Inc's Operating Margin for the fiscal year that ended in Aug. 2013 is calculated as

Operating Margin=Operating Income (A: Aug. 2013 ) / Revenue (A: Aug. 2013 )
=427.414 / 3681.31
=11.61 %

Apollo Education Group Inc's Operating Margin for the quarter that ended in May. 2014 is calculated as

Operating Margin=Operating Income (Q: May. 2014 ) / Revenue (Q: May. 2014 )
=113.064 / 799.919
=14.13 %

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.


Explanation

Just like Gross Margin, it is important to see a company maintains its operating margin over time. Among the same industry, a company with higher operating margin is more efficient in its operation. It is also more stable during industry slowdown or recessions. Peter Lynch prefers those with higher margins than those with lower margins.


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.


Related Terms

Gross Margin, Operating Income, Revenue, Cost of Goods Sold, Selling, General, & Admin. Expense (SGA), Research & Development, Depreciation, Depletion and Amortization


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Apollo Education Group Inc Annual Data

Aug04Aug05Aug06Aug07Aug08Aug09Aug10Aug11Aug12Aug13
Operating Margin 24.3730.9926.2422.9723.8626.9620.5220.2915.9011.61

Apollo Education Group Inc Quarterly Data

Feb12May12Aug12Nov12Feb13May13Aug13Nov13Feb14May14
Operating Margin 10.7719.738.9921.893.5713.944.1119.831.0514.13
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Free 7-day Trial
FEEDBACK
Email Hide