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Arch Coal Inc (NYSE:ACI)
Profitability Rank
3 (As of Jun. 2014)

Arch Coal Inc has the Profitability Rank of 3. It has had trouble to make a profit.

GuruFocus Profitability Rank ranks how profitable a company is and how likely the company’s business will stay that way. It is based on these factors:

• 1. Operating Margin
• 2. Piotroski F-Score
• 3. Trend of the Operating Margin (5-year average). The company with an uptrend profit margin has a higher rank.
• 4. Consistency of the profitability
• 5. Predictability Rank

Arch Coal Inc's operating margin for the quarter that ended in Jun. 2014 was -5.02%. As of today, Arch Coal Inc's Piotroski F-Score is 2.


Definition

GuruFocus Profitability Rank ranks how profitable a company is and how likely the company’s business will stay that way.

The maximum rank is 10. A rank of 7 or higher means a higher profitability and may stay that way. A rank of 3 or lower indicates that the company has had trouble to make a profit.

Arch Coal Inc has the Profitability Rank of 3. It has had trouble to make a profit.

Profitability Rank is not directly related to the Financial Strength Rank. But if a company is consistently profitable, its financial strength will be stronger.

Profitability Rank is based on these factors:

•1. Operating Margin

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.

Arch Coal Inc's Operating Margin for the quarter that ended in Jun. 2014 is calculated as:

Operating Margin=Operating Income (Q: Jun. 2014 ) / Revenue (Q: Jun. 2014 )
=-35.805 / 713.776
=-5.02 %

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

•2. Piotroski F-Score

Warning Sign:

Piotroski F-Score of 2 is low, which usually implies poor business operation.

The zones of discrimination were as such:

Good or high score = 8 or 9
Bad or low score = 0 or 1

Arch Coal Inc has an F-score of 2. It is a bad or low score, which usually implies poor business operation.

•3. Trend of the Operating Margin (5-year average). The company with an uptrend profit margin has a higher rank.

•4. Consistency of the profitability

•5. Predictability Rank


Related Terms

Financial Strength Rank, Operating Margin, Piotroski F-Score

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