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H&R Block Inc (NYSE:HRB)
Operating Margin
50.53% (As of Apr. 2016)

Operating margin is calculated as operating income divided by its revenue. H&R Block Inc's operating income for the three months ended in Apr. 2016 was $1,161 Mil. H&R Block Inc's revenue for the three months ended in Apr. 2016 was $2,297 Mil. Therefore, H&R Block Inc's operating margin for the quarter that ended in Apr. 2016 was 50.53%.

Good Sign:

H&R Block Inc operating margin is expanding. Margin expansion is usually a good sign.

HRB' s Operating Margin Range Over the Past 10 Years
Min: 16.4   Max: 25.81
Current: 20.57

16.4
25.81
HRB's Operating Margin is ranked higher than
83% of the 90 Companies
in the Global Personal Services industry.

( Industry Median: 7.91 vs. HRB: 20.57 )

H&R Block Inc's 5-Year Average operating margin Growth Rate was 5.00% per year.

H&R Block Inc's operating income for the three months ended in Apr. 2016 was $1,161 Mil. Its operating income for the trailing twelve months (TTM) ended in Apr. 2016 was $633 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.

H&R Block Inc's Operating Margin for the fiscal year that ended in Apr. 2016 is calculated as

Operating Margin=Operating Income (A: Apr. 2016 ) / Revenue (A: Apr. 2016 )
=633.192 / 3038.153
=20.84 %

H&R Block Inc's Operating Margin for the quarter that ended in Apr. 2016 is calculated as

Operating Margin=Operating Income (Q: Apr. 2016 ) / Revenue (Q: Apr. 2016 )
=1160.849 / 2297.477
=50.53 %

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's 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 local exchange's currency.

H&R Block Inc Annual Data

Apr07Apr08Apr09Apr10Apr11Apr12Apr13Apr14Apr15Apr16
Operating Margin 16.4017.3620.5420.0017.6319.5723.9725.2425.8120.84

H&R Block Inc Quarterly Data

Apr14Jul14Oct14Jan15Apr15Jul15Oct15Jan16Apr16Jul16
Operating Margin 57.03-131.10-137.01-14.7652.82-126.33-182.09-25.2550.53-147.56
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