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# Operating Income

: \$ Mil (TTM As of . 20)
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's Operating Income for the six months ended in . 20 was \$0.00 Mil.

Operating Margin % is calculated as Operating Income divided by its Revenue. 's Operating Income for the six months ended in . 20 was \$0.00 Mil. 's Revenue for the six months ended in . 20 was \$0.00 Mil. Therefore, 's Operating Margin % for the quarter that ended in . 20 was %.

's 5-Year average Growth Rate for Operating Margin % was % per year.

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

## Operating Income Historical Data

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

 Annual Data Operating Income

 Semi-Annual Data Operating Income

## 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 semi-annually, GuruFocus uses latest annual data as the TTM data. Operating Income for the trailing twelve months (TTM) ended in . 20 was \$ Mil.

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

(:) Operating Income Explanation

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

's annualized ROC % for the quarter that ended in . 20 is calculated as:

 ROC % (Q: . 20 ) = NOPAT / Average Invested Capital = Operating Income * ( 1 - Tax Rate % ) / ( (Invested Capital (Q: . 20 ) + Invested Capital (Q: . 20 )) / count ) = * ( 1 - % ) / ( ( + ) / ) = / = %

where

 Invested Capital (Q: . 20 ) = 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 )) = - - ( - max(0, - + )) =

 Invested Capital (Q: . 20 ) = 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 )) = - - ( - max(0, - + )) =

Note: The Operating Income data used here is one times the annual (. 20) data.

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

's annualized ROC (Joel Greenblatt) % for the quarter that ended in . 20 is calculated as:

 ROC (Joel Greenblatt) % (Q: . 20 ) = EBIT / Average of (Net fixed Assets + Net Working Capital) = EBIT / Average of (Property, Plant and Equipment + Net Working Capital) Q: . 20 Q: . 20 = EBIT / ( ( (Property, Plant and Equipment + Net Working Capital) + (Property, Plant and Equipment + Net Working Capital) ) / count ) = / ( ( ( + max(, 0)) + ( + max(, 0)) ) / ) = / ( ( + ) / ) = / = %

where Working Capital is:

 Working Capital (Q: . 20 ) = (Accounts Receivable + Total Inventories + Other Current Assets) - (Accounts Payable & Accrued Expense + Defer. Rev. + Other Current Liabilities) = ( + + ) - ( + + ) =

 Working Capital (Q: . 20 ) = (Accounts Receivable + Total Inventories + Other Current Assets) - (Accounts Payable & Accrued Expense + Defer. Rev. + Other Current Liabilities) = ( + + ) - ( + + ) =

When net working capital is negative, 0 is used.

Note: The EBIT data used here is one times the annual (. 20) EBIT data.

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

's Operating Margin % for the quarter that ended in . 20 is calculated as:

 Operating Margin % = Operating Income (Q: . 20 ) / Revenue (Q: . 20 ) = / = %

* 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.