Dell (DELL) Operating Income : $1,785.00 Mil (TTM As of Jul. 2013)

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What is Dell Operating Income?

Dell's Operating Income for the three months ended in Jul. 2013 was $272.00 Mil. Its Operating Income for the trailing twelve months (TTM) ended in Jul. 2013 was $1,785.00 Mil.

Operating Margin % is calculated as Operating Income divided by its Revenue. Dell's Operating Income for the three months ended in Jul. 2013 was $272.00 Mil. Dell's Revenue for the three months ended in Jul. 2013 was $14,514.00 Mil. Therefore, Dell's Operating Margin % for the quarter that ended in Jul. 2013 was 1.87%.

Dell'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. Dell's annualized ROC % for the quarter that ended in Jul. 2013 was 3.85%. Dell's annualized ROC (Joel Greenblatt) % for the quarter that ended in Jul. 2013 was 50.05%.

Dell Operating Income Historical Data

The historical data trend for Dell'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.

Dell Operating Income Chart

Dell Annual Data

Trend

Jan04

Jan05

Jan06

Jan07

Jan08

Jan09

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Jan11

Jan12

Jan13

Operating Income

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3,190.00

2,172.00

3,433.00

4,431.00

3,012.00

Dell Quarterly Data
	Oct08	Jan09	Apr09	Jul09	Oct09	Jan10	Apr10	Jul10	Oct10	Jan11	Apr11	Jul11	Oct11	Jan12	Apr12	Jul12	Oct12	Jan13	Apr13	Jul13
Operating Income	Get a 7-Day Free Trial															901.00	589.00	698.00	226.00	272.00

Dell 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.

Operating Income for the trailing twelve months (TTM) ended in Jul. 2013 adds up the quarterly data reported by the company within the most recent 12 months, which was $1,785.00 Mil.

Dell (DELISTED:DELL) Operating Income Explanation

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

Dell's annualized ROC % for the quarter that ended in Jul. 2013 is calculated as:

	ROC % (Q: Jul. 2013 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Apr. 2013 )	+	Invested Capital (Q: Jul. 2013 ))	/ count )
=	1088 * ( 1 - 6.85% )	/	( (26530	+	26053)	/ 2 )
=	1013.472	/	26291.5
=	3.85 %

where

	Invested Capital		(Q: Apr. 2013 )
=	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	))
=	44791	-	14392	-	( 10905	-	max(0, 21790	-	25659	+	10905	))
=	26530

	Invested Capital		(Q: Jul. 2013 )
=	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	))
=	45871	-	15708	-	( 11828	-	max(0, 22756	-	26866	+	11828	))
=	26053

Note: The Operating Income data used here is four times the quarterly (Jul. 2013) data.

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

Dell's annualized ROC (Joel Greenblatt) % for the quarter that ended in Jul. 2013 is calculated as:

	ROC (Joel Greenblatt) %		(Q: Jul. 2013 )
=	EBIT	/	Average of (Net fixed Assets	+	Net Working Capital)
=	EBIT	/	Average of (Property, Plant and Equipment	+	Net Working Capital)
			Q: Apr. 2013		Q: Jul. 2013
=	EBIT	/	( ( (Property, Plant and Equipment + Net Working Capital)	+	(Property, Plant and Equipment + Net Working Capital) )	/	count )
=	1088	/	( ( (2136 + max(-6894, 0))	+	(2212 + max(-8113, 0)) )	/	2 )
=	1088	/	( ( 2136	+	2212 )	/	2 )
=	1088	/	2174
=	50.05 %

where Working Capital is:

	Working Capital		(Q: Apr. 2013 )
=	(Accounts Receivable	+	Total Inventories	+	Other Current Assets)	-	(Accounts Payable & Accrued Expense	+	Defer. Rev.	+	Other Current Liabilities)
=	(6440	+	1387	+	3936)	-	(14392	+	4265	+	0)
=	-6894

	Working Capital		(Q: Jul. 2013 )
=	(Accounts Receivable	+	Total Inventories	+	Other Current Assets)	-	(Accounts Payable & Accrued Expense	+	Defer. Rev.	+	Other Current Liabilities)
=	(6591	+	1468	+	3848)	-	(15708	+	4312	+	0)
=	-8113

When net working capital is negative, 0 is used.

Note: The EBIT data used here is four times the quarterly (Jul. 2013) EBIT data.

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

Dell's Operating Margin % for the quarter that ended in Jul. 2013 is calculated as:

Operating Margin %	=	Operating Income (Q: Jul. 2013 )	/	Revenue (Q: Jul. 2013 )
	=	272	/	14514
	=	1.87 %

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.

Dell Operating Income Related Terms

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Dell (DELL) Business Description

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Dell Inc is a Delaware Corporation, which was founded in 1984. The Company offers a range of technology solutions, including servers and networking products, storage products, services, software and peripherals, mobility products, and desktop PCs. The Company sells its products and services directly to customers through dedicated distribution channels, such as retailers, distributors, and resellers. Its business segments are Large Enterprise, Public, Small and Medium Business ('SMB'), and Consumer. Large Enterprise customers include large global and national corporate businesses. Public customers, which include educational institutions, government, health care, and law enforcement agencies, operate in their own communities. SMB segment is focused on helping small and medium-sized businesses get the most out of their technology by offering scalable products, services, and solutions. Consumer segment is focused on delivering what customers want from the total technology experience of entertainment, mobility, gaming, and design. The Company designs, develops, manufactures, markets, sells, and supports a range of products, solutions, and services. The Company also provides various customer financial services to its Commercial and Consumer customers. Its enterprise solutions include servers, networking, and storage products. The Company's services include a range of configurable IT and business services, including infrastructure technology, consulting and applications, and product-related support services. The Company offers Dell-branded printers and displays and a multitude of competitively priced third-party peripheral products such as printers, televisions, notebook accessories, mice, keyboards, networking and wireless products, digital cameras, and other products. The Company also sells a range of third-party software products, including operating systems, business and office applications, anti-virus and related security software, entertainment software, and products in various other categories. Client Products offers a variety of mobility and desktop products, including notebooks, workstations, tablets, smartphones, and desktop PCs, to its Commercial and Consumer customers. The Company offers or arranges various financing options and services for its Commercial and Consumer customers in the U.S. and Canada through Dell Financial Services ('DFS'). DFS offers a range of financial services, including originating, collecting, and servicing customer receivables related to the purchase of Dell products. DFS offers private label credit financing programs to qualified Consumer and Commercial customers and offers leases and fixed-term financing to Commercial customers. The Company sells its products and services directly to customers and through various other sales distribution channels, such as retailers, third-party solution providers, system integrators, and third-party resellers. Its customers include large global and national corpora