American Power (American Power) Operating Income : $-1.14 Mil (TTM As of Sep. 2012)

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What is American Power Operating Income?

American Power's Operating Income for the six months ended in Sep. 2012 was $-1.14 Mil. Its Operating Income for the trailing twelve months (TTM) ended in Sep. 2012 was $-1.14 Mil.

Operating Margin % is calculated as Operating Income divided by its Revenue. American Power's Operating Income for the six months ended in Sep. 2012 was $-1.14 Mil. American Power's Revenue for the six months ended in Sep. 2012 was $0.00 Mil. Therefore, American Power's Operating Margin % for the quarter that ended in Sep. 2012 was %.

American Power'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. American Power's annualized ROC % for the quarter that ended in Sep. 2012 was -29.93%. American Power's annualized ROC (Joel Greenblatt) % for the quarter that ended in Sep. 2012 was -42.76%.

American Power Operating Income Historical Data

The historical data trend for American Power'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.

American Power Operating Income Chart

American Power Annual Data

Trend

Sep07

Sep08

Sep09

Sep10

Sep11

Sep12

Operating Income

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-0.01

-0.02

-0.34

-1.62

-1.14

American Power Semi-Annual Data
	Sep07	Sep08	Sep09	Sep10	Sep11	Sep12
Operating Income	Get a 7-Day Free Trial			-0.01	-0.02	-0.34	-1.62	-1.14

American Power 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.

For stock reported annually, GuruFocus uses latest annual data as the TTM data. Operating Income for the trailing twelve months (TTM) ended in Sep. 2012 was $-1.14 Mil.

American Power (OTCPK:AMPW) Operating Income Explanation

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

American Power's annualized ROC % for the quarter that ended in Sep. 2012 is calculated as:

	ROC % (Q: Sep. 2012 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Sep. 2011 )	+	Invested Capital (Q: Sep. 2012 ))	/ count )
=	-1.143 * ( 1 - % )	/	( (3.224	+	4.414)	/ 2 )
=	-1.143	/	3.819
=	-29.93 %

where

	Invested Capital		(Q: Sep. 2011 )
=	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	))
=	3.441	-	0.242	-	( 0.63	-	max(0, 0.673	-	0.648	+	0.63	))
=	3.224

	Invested Capital		(Q: Sep. 2012 )
=	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	))
=	2.823	-	0.249	-	( 0	-	max(0, 1.849	-	0.009	+	0	))
=	4.414

Note: The Operating Income data used here is one times the annual (Sep. 2012) data.

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

American Power's annualized ROC (Joel Greenblatt) % for the quarter that ended in Sep. 2012 is calculated as:

	ROC (Joel Greenblatt) %		(Q: Sep. 2012 )
=	EBIT	/	Average of (Net fixed Assets	+	Net Working Capital)
=	EBIT	/	Average of (Property, Plant and Equipment	+	Net Working Capital)
			Q: Sep. 2011		Q: Sep. 2012
=	EBIT	/	( ( (Property, Plant and Equipment + Net Working Capital)	+	(Property, Plant and Equipment + Net Working Capital) )	/	count )
=	-1.143	/	( ( (2.674 + max(-0.224, 0))	+	(2.672 + max(-0.24, 0)) )	/	2 )
=	-1.143	/	( ( 2.674	+	2.672 )	/	2 )
=	-1.143	/	2.673
=	-42.76 %

where Working Capital is:

	Working Capital		(Q: Sep. 2011 )
=	(Accounts Receivable	+	Total Inventories	+	Other Current Assets)	-	(Accounts Payable & Accrued Expense	+	Defer. Rev.	+	Other Current Liabilities)
=	(0	+	0	+	0.018)	-	(0.242	+	0	+	0)
=	-0.224

	Working Capital		(Q: Sep. 2012 )
=	(Accounts Receivable	+	Total Inventories	+	Other Current Assets)	-	(Accounts Payable & Accrued Expense	+	Defer. Rev.	+	Other Current Liabilities)
=	(0	+	0	+	0.009)	-	(0.249	+	0	+	-2.2204460492503E-16)
=	-0.24

When net working capital is negative, 0 is used.

Note: The EBIT data used here is one times the annual (Sep. 2012) EBIT data.

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

American Power's Operating Margin % for the quarter that ended in Sep. 2012 is calculated as:

Operating Margin %	=	Operating Income (Q: Sep. 2012 )	/	Revenue (Q: Sep. 2012 )
	=	-1.143	/	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.

American Power Operating Income Related Terms

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American Power (American Power) Business Description

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http://www.americanpowerco.com

American Power Corp was incorporated in the State of Nevada on August 7, 2007. It is an exploration stage company engaged in coal, oil and natural gas exploration, development and production. The Company's current primary business focus is to acquire, explore and develop coal, oil and gas exploration properties in the United States of North America, with a particular focus on the Rocky Mountain region. It has acquired an assignment of certain contractual rights in coal and minerals located in Judith Basin County, Montana, collectively described as the 'Pace Coal Project', however these rights are speculative in nature and additional exploration work is required to determine their value.

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