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IMTH (Innovative MedTech) Earnings Power Value (EPV) : $-1.30 (As of Sep24)


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What is Innovative MedTech Earnings Power Value (EPV)?

As of Sep24, Innovative MedTech's earnings power value is $-1.30. *

* GuruFocus does not store EPV value into our database if Average Maintenance CAPEX is 0.

Margin of Safety is N/A.

The basic concept of EPV is that one should value a stock based on the current free cash flow of a company and not on future projections which may, or may not, come true. It is arguably a better way to analyze stocks than Discounted Cash Flow analysis that relies on highly speculative growth assumptions many years into the future. Assumption: Current profitability is sustainable.


Innovative MedTech Earnings Power Value (EPV) Historical Data

The historical data trend for Innovative MedTech's Earnings Power Value (EPV) 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.

Innovative MedTech Earnings Power Value (EPV) Chart

Innovative MedTech Annual Data
Trend Oct10 Oct11 Oct12 Oct13 Oct14 Jun20 Jun21 Jun22 Jun23 Jun24
Earnings Power Value (EPV)
Get a 7-Day Free Trial Premium Member Only Premium Member Only -4.81 - - - -1.22

Innovative MedTech Quarterly Data
Jul14 Oct14 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22 Sep22 Dec22 Mar23 Jun23 Sep23 Dec23 Mar24 Jun24 Sep24
Earnings Power Value (EPV) Get a 7-Day Free Trial 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 -1.00 -1.15 -1.32 -1.22 -1.30

Competitive Comparison of Innovative MedTech's Earnings Power Value (EPV)

For the Medical Instruments & Supplies subindustry, Innovative MedTech's Earnings Power Value (EPV), along with its competitors' market caps and Earnings Power Value (EPV) data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.


Innovative MedTech's Earnings Power Value (EPV) Distribution in the Medical Devices & Instruments Industry

For the Medical Devices & Instruments industry and Healthcare sector, Innovative MedTech's Earnings Power Value (EPV) distribution charts can be found below:

* The bar in red indicates where Innovative MedTech's Earnings Power Value (EPV) falls into.



Innovative MedTech Earnings Power Value (EPV) Calculation

Earnings Power Value also known as just Earnings Power is a valuation technique popularised by Bruce Greenwald, an authority on value investing at Columbia University. It is arguably a better way to analyze stocks than Discounted Cash Flow analysis that relies on highly speculative growth assumptions many years into the future.

The basic concept of EPV is that one should value a stock based on the current free cash flow of a company and not on future projections which may, or may not, come true. This valuation tool excludes the potential growth that a company may have so that needs to be looked at separately. Since future growth is excluded from the analysis, only the maintenance capital expenditures are subtracted from after-tax EBIT (earnings before interest and taxes) and growth capex is ignored.

Innovative MedTech's "Earning Power" Calculation:

Average of Last 20 Quarters Last Quarter
Revenue 1.13
DDA 0.04
Operating Margin % -386.67
SGA * 25% 1.49
Tax Rate % 0.00
Maintenance Capex 0.18
Cash and Cash Equivalents 0.17
Short-Term Debt 1.71
Long-Term Debt 0.54
Shares Outstanding (Diluted) 27.72

1. Start with "Earnings" not including accounting adjustments (one-time charges not excluded unless policy has changed). "Earnings" are "Operating Income.

2. Look at average margins over a business/Industry cycle: Average Operating Margin = -386.67%

To normalize margins and eliminate the effects on profitability of valuing the firm at different points in the business cycle, it is usually best to take a long-term average of operating margins. Ideally this would be as long as 10 years and include at least one economic downturn. However, since most of companies do not have as long as 10-year history, here GuruFocus uses the latest 5 years data to do the calculation. To smooth out unusual years but reflect recent developments, we take an average of the 5 year margin.

3. Multiply average margins by sustainable revenues and then adjust for maintenance SGA. This yields "normalized" EBIT:

To be conservative, GuruFocus uses an average of the 5 year revenues as the sustainable revenue.
EPV analysis recognises that part of SG&A expenditure is made to maintain and replace the existing assets, while part is made to grow sales. Since EPV is only interested in what it costs a going concern to maintain its existing asset base, it adds back a percentage of SG&A (between 15% and 50% - this is a matter of judgment and industry knowledge) to make up for the fact that some of this expenditure went to fund growth and shouldn't be accounted for. To start off, we assume 25% for the sake of prudence.
Sustainable Revenue = $1.13 Mil, Average Operating Margin = -386.67%, Average Adjusted SGA = 1.49,
therefore "Normalized" EBIT = Sustainable Revenue * Average Operating Margin + Average Adjusted SGA = 1.13 * -386.67% +1.49 = $-2.86310375 Mil.

4. Multiply by one minus Average Tax Rate (NOPAT):

Same as average operating margin calculation, GuruFocus takes an average of the 5 years tax rates.
Average Tax Rate = 0.00%, and "Normalized" EBIT = $-2.86310375 Mil,
therefore After-tax "Normalized" EBIT = "Normalized" EBIT * ( 1 - Average Tax Rate ) = -2.86310375 * ( 1 - 0.00% ) = $-2.86310375 Mil.

5. Add back Excess Depreciation (after tax at 1/2 average tax rate). This yields "normalized" Earnings:

Excess Depreciation = Average DDA * % of Excess Depreciation (after tax at 1/2 average tax rate) = 0.04 * 0.5 * 0.00% = $0 Mil.
"Normalized" Earnings = After-tax "Normalized" EBIT + Excess Depreciation = -2.86310375 + 0 = $-2.86310375 Mil.

6. Adjusted for Maintenance Capital Expenditure:

First, calculate the revenue change regarding to the previous year. If the revenue decreased from the previous year, then the Maintenance Capital Expenditure = Capital Expenditure (positive).
Second, if the revenue increased from the previous year, then calculate the percentage of Net PPE as of corresponding Revenue.
Third, calculate Capital Expenditure (positive) - percentage of Net PPE as of corresponding Revenue * revenue increase.
If [Capital Expenditure (positive) - percentage of Net PPE as of corresponding Revenue * revenue increase] was negative, then the Maintenance Capital Expenditure = Capital Expenditure (positive).
If [Capital Expenditure (positive) - percentage of Net PPE as of corresponding Revenue * revenue increase] was positive, then the Maintenance Capital Expenditure = Capital Expenditure (positive) - percentage of Net PPE as of corresponding Revenue * revenue increase.
Fourth, GuruFocus uses an average of the 5 year maintenance capital expenditures as maintenance CAPEX.
Innovative MedTech's Average Maintenance CAPEX = $0.18 Mil *.
* GuruFocus does not store EPV value into our database if Average Maintenance CAPEX is 0.

7. Investors require a return of "WACC" for the risk they are taking: WACC = 9%

8. Innovative MedTech's current cash and cash equivalent = $0.17 Mil.
Innovative MedTech's current interest bearing debt = Long-Term Debt & Capital Lease Obligation + Short-Term Debt & Capital Lease Obligation = 0.54 + 1.71 = $2.251 Mil.
Innovative MedTech's current Shares Outstanding (Diluted Average) = 27.72 Mil.

Innovative MedTech's Earnings Power Value (EPV) for Sep24 is calculated as:

EPV = ( ( Norm. Earnings-Maint. CAPEX *) / WACC + CashandEquiv - Int. Bearing Debt ) / Shares Outstanding (Diluted Average)
= ( ( -2.86310375 - 0.18)/ 9%+0.17-2.251 )/27.72
=-1.30

Margin of Safety (EPV)=( Earnings Power Value (EPV)-Current Price )/Earnings Power Value (EPV)
=( -1.2956217508588-0.45 )/-1.2956217508588
= N/A

* 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.

* GuruFocus does not store EPV value into our database if Average Maintenance CAPEX is 0.


Innovative MedTech  (OTCPK:IMTH) Earnings Power Value (EPV) Explanation

Assumption: Current profitability is sustainable.

Earnings power value (EPV) uses a very basic equation which assumes no growth, although it does rely on an assumption about the cost of capital as well as the fact that current earnings are sustainable. It also involves several adjustments to clean up the underlying Earnings figures.


Be Aware

Though using today's earnings in calculating Earnings Power Value, GuruFocus is normalizing these earnings to the business cycle. This eliminates the effects on profitability of valuing the firm at different points in the business cycle. This means that we are considering the average earnings over 5 years.


Innovative MedTech Earnings Power Value (EPV) Related Terms

Thank you for viewing the detailed overview of Innovative MedTech's Earnings Power Value (EPV) provided by GuruFocus.com. Please click on the following links to see related term pages.


Innovative MedTech Business Description

Traded in Other Exchanges
N/A
Address
2310 York Street, Suite 200, Blue Island, IL, USA, 60406
Innovative MedTech Inc is a provider of health and wellness services. It develops, manufactures, and sells a variety of medical devices and supplies, including blood collection and infusion products, surgical instruments, and wound care products. The company operates in two divisions: technology and devices and Adult Day Services.
Executives
Merle Griff officer: Chief Executive Officer 2310 YORK ST, SUITE 200, BLUE ISLAND IL 60406
Eddie Dovner 10 percent owner 70 SE 4TH AVE, DELRAY BEACH FL 33483
Charles Everhardt director, 10 percent owner, other: Chairman of the Board 2310 YORK ST, STE 200, BLUE ISLAND IL 60406
Arthur Friedman 10 percent owner 280 MADISON AVE #1007, NEW YORK NY 10016
Marcia Roberts 10 percent owner 280 MADISON AVENUE, SUITE 1005, NEW YORK NY 10016
Michael Jordan Friedman director, 10 percent owner, officer: President & CEO 280 MADISON AVENUE, SUITE 1005, NEW YORK NY 10016
Illuminate, Inc. 10 percent owner 881 KENNEDY BLVD., JERSEY CITL NJ 07002
A William Bodine director, officer: CFO 280 MADISON AVENUE, SUITE 1005, NEW YORK NY 10016
Dominick M Cingari director, officer: COO 280 MADISON AVENUE, SUITE 1005, NEW YORK NY 10016
Jay Odintz director 280 MADISON AVENUE, NEW YORK NY 10016
Vincent L Verdiramo director, officer: President 3163 KENNEDY BLVD, JERSEY CITY NJ 07306