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Operating margin is calculated as operating income divided by its revenue. Cal-Maine Foods Inc's operating income for the three months ended in Aug. 2014 was $41 Mil. Cal-Maine Foods Inc's revenue for the three months ended in Aug. 2014 was $357 Mil. Therefore, Cal-Maine Foods Inc's operating margin for the quarter that ended in Aug. 2014 was 11.53%.
Cal-Maine Foods Inc operating margin has been in 5-year decline. The average rate of decline per year is -10.9%.
Cal-Maine Foods Inc's 3-Year Average operating margin Growth Rate was -10.90% per year.
Cal-Maine Foods Inc's operating income for the three months ended in Aug. 2014 was $41 Mil. Its operating income for the trailing twelve months (TTM) ended in Aug. 2014 was $176 Mil.
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.
Cal-Maine Foods Inc's Operating Margin for the fiscal year that ended in May. 2014 is calculated as
|Operating Margin||=||Operating Income (A: May. 2014 )||/||Revenue (A: May. 2014 )|
Cal-Maine Foods Inc's Operating Margin for the quarter that ended in Aug. 2014 is calculated as
|Operating Margin||=||Operating Income (Q: Aug. 2014 )||/||Revenue (Q: Aug. 2014 )|
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.
Compared with a companys 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 companys 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 Nokias 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. GuruFocuss 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.
Cal-Maine Foods Inc Annual Data
Cal-Maine Foods Inc Quarterly Data