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Gouverneur Bancorp Inc  (OTCPK:GOVB) Operating Income: $1.49 Mil (TTM As of Jun. 2008)

Gouverneur Bancorp Inc's Operating Income for the three months ended in Jun. 2008 was $0.35 Mil. ts operating income for the trailing twelve months (TTM) ended in Jun. 2008 was $1.49 Mil.

Operating Margin % is calculated as Operating Income divided by its Revenue. Gouverneur Bancorp Inc's Operating Income for the three months ended in Jun. 2008 was $0.35 Mil. Gouverneur Bancorp Inc's Revenue for the three months ended in Jun. 2008 was $1.23 Mil. Therefore, Gouverneur Bancorp Inc's Operating Margin % for the quarter that ended in Jun. 2008 was 28.09%.

Gouverneur Bancorp Inc'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. Gouverneur Bancorp Inc's annualized ROC % for the quarter that ended in Jun. 2008 was 2.15%. Gouverneur Bancorp Inc's annualized ROC (Joel Greenblatt) % for the quarter that ended in Jun. 2008 was 42.77%.


Historical Data

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

* Premium members only.

Gouverneur Bancorp Inc Annual Data

Sep98 Sep99 Sep00 Sep01 Sep02 Sep03 Sep04 Sep05 Sep06 Sep07
Operating Income Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 0.95 1.42 1.54 1.90 1.46

Gouverneur Bancorp Inc Quarterly Data

Sep03 Dec03 Mar04 Jun04 Sep04 Dec04 Mar05 Jun05 Sep05 Dec05 Mar06 Jun06 Sep06 Dec06 Mar07 Jun07 Sep07 Dec07 Mar08 Jun08
Operating Income Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 0.42 0.43 0.36 0.35 0.35

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.

Gouverneur Bancorp Inc's Operating Income for the fiscal year that ended in Sep. 2007 is calculated as

Operating Income(A: Sep. 2007 )
=Revenue-Cost of Goods Sold-Selling, General, & Admin. Expense
=4.954-0-1.795
-Research & Development-Depreciation, Depletion and Amortization-Others
-0-0.28-1.418
=1.46

Gouverneur Bancorp Inc's Operating Income for the quarter that ended in is calculated as

Operating Income(Q: Jun. 2008 )
=Revenue-Cost of Goods Sold-Selling, General, & Admin. Expense
=1.228-0-0.485
-Research & Development-Depreciation, Depletion and Amortization-Others (1)
-0-0.074-0.324
=0.35

Operating Income(Q: Jun. 2008 )
=EBITDA-Depreciation, Depletion and Amortization-Others (2)
=0.419-0.074-0
=0.35

Operating Income for the trailing twelve months (TTM) ended in Jun. 2008 was 0.434 (Sep. 2007 ) + 0.361 (Dec. 2007 ) + 0.349 (Mar. 2008 ) + 0.345 (Jun. 2008 ) = $1.49 Mil.

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


Explanation

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

Gouverneur Bancorp Inc's annualized ROC % for the quarter that ended in Jun. 2008 is calculated as:

ROC %(Q: Jun. 2008 )
=NOPAT/Average Invested Capital
=Operating Income*(1-Tax Rate)/( (Invested Capital (Q: Mar. 2008 ) + Invested Capital (Q: Jun. 2008 ))/2)
=1.38 * ( 1 - 34.2% )/( (42.685 + 41.676)/2)
=0.90804/42.1805
=2.15 %

where

Invested Capital(Q: Mar. 2008 )
=Book Value of Debt + Book Value of Equity - Cash
=Long-Term Debt & Capital Lease Obligation + Current Portion of Long-Term Debt + Total Equity - Cash
=29.2 + 0 + 20.708 - 7.223
=42.685

Invested Capital(Q: Jun. 2008 )
=Book Value of Debt + Book Value of Equity - Cash
=Long-Term Debt & Capital Lease Obligation + Current Portion of Long-Term Debt + Total Equity - Cash
=27.95 + 0 + 20.821 - 7.095
=41.676

Note: The Operating Income data used here is four times the quarterly (Jun. 2008) operating income data.

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

Gouverneur Bancorp Inc's annualized ROC (Joel Greenblatt) % for the quarter that ended in Jun. 2008 is calculated as:

ROC (Joel Greenblatt's)(Q: Jun. 2008 )
=EBIT/Average of (Net fixed Assets + Net Working Capital)
=EBIT/Average of (Property, Plant and Equipment+Net Working Capital)
     Q: Mar. 2008  Q: Jun. 2008
=EBIT/( ( (Property, Plant and Equipment + Net Working Capital) + (Property, Plant and Equipment + Net Working Capital) )/2 )
=1.38/( ( (3.212 + max(-7.223, 0)) + (3.241 + max(-7.095, 0)) )/2 )
=1.38/( ( 3.212 + 3.241 )/2 )
=1.38/3.2265
=42.77 %

where Working Capital is:

Working Capital(Q: Mar. 2008 )
=(Accounts Receivable + Total Inventories + Other Current Assets) - (Accounts Payable & Accrued Expense + Defer. Rev. + Other Current Liabilities)
=(2.438 + 0 + -9.661) - (0 + 0 + 0)
=-7.223

Working Capital(Q: Jun. 2008 )
=(Accounts Receivable + Total Inventories + Other Current Assets) - (Accounts Payable & Accrued Expense + Defer. Rev. + Other Current Liabilities)
=(2.202 + 0 + -9.297) - (0 + 0 + 0)
=-7.095

When net working capital is negative, 0 is used.

Note: The EBIT data used here is four times the quarterly (Jun. 2008) EBIT data.

3. Operating Income is also linked to Operating Margin:

Gouverneur Bancorp Inc's Operating Margin % for the quarter that ended in Jun. 2008 is calculated as:

Operating Margin %=Operating Income (Q: Jun. 2008 )/Revenue (Q: Jun. 2008 )
=0.345/1.228
=28.09 %

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

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.


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