Fortune Industries, (FRA:FD9A) Operating Income : €-0.89 Mil (TTM As of Mar. 2013)

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What is Fortune Industries, Operating Income?

Fortune Industries,'s Operating Income for the three months ended in Mar. 2013 was €-2.50 Mil. Its Operating Income for the trailing twelve months (TTM) ended in Mar. 2013 was €-0.89 Mil.

Operating Margin % is calculated as Operating Income divided by its Revenue. Fortune Industries,'s Operating Income for the three months ended in Mar. 2013 was €-2.50 Mil. Fortune Industries,'s Revenue for the three months ended in Mar. 2013 was €11.49 Mil. Therefore, Fortune Industries,'s Operating Margin % for the quarter that ended in Mar. 2013 was -21.78%.

Fortune Industries,'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. Fortune Industries,'s annualized ROC % for the quarter that ended in Mar. 2013 was -95.44%. Fortune Industries,'s annualized ROC (Joel Greenblatt) % for the quarter that ended in Mar. 2013 was -8,035.34%.

Fortune Industries, Operating Income Historical Data

The historical data trend for Fortune Industries,'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.

Fortune Industries, Operating Income Chart

Fortune Industries, Annual Data

Trend

Aug03

Aug04

Aug05

Aug06

Aug07

Aug08

Jun09

Jun10

Jun11

Jun12

Operating Income

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-9.84

0.29

0.66

1.28

1.86

Fortune Industries, Quarterly Data
	May08	Aug08	Nov08	Feb09	May09	Sep09	Dec09	Mar10	Jun10	Sep10	Dec10	Mar11	Jun11	Sep11	Dec11	Mar12	Jun12	Sep12	Dec12	Mar13
Operating Income	Get a 7-Day Free Trial															0.37	0.54	0.68	0.41	-2.50

Fortune Industries, 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 Mar. 2013 adds up the quarterly data reported by the company within the most recent 12 months, which was €-0.89 Mil.

Fortune Industries, (FRA:FD9A) Operating Income Explanation

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

Fortune Industries,'s annualized ROC % for the quarter that ended in Mar. 2013 is calculated as:

	ROC % (Q: Mar. 2013 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Dec. 2012 )	+	Invested Capital (Q: Mar. 2013 ))	/ count )
=	-10.012 * ( 1 - -0.8% )	/	( (12.035	+	9.114)	/ 2 )
=	-10.092096	/	10.5745
=	-95.44 %

where

	Invested Capital		(Q: Dec. 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	))
=	22.152	-	6.47	-	( 4.9	-	max(0, 6.54	-	10.187	+	4.9	))
=	12.035

	Invested Capital		(Q: Mar. 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	))
=	20.036	-	6.981	-	( 6.015	-	max(0, 7.056	-	10.997	+	6.015	))
=	9.114

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

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

Fortune Industries,'s annualized ROC (Joel Greenblatt) % for the quarter that ended in Mar. 2013 is calculated as:

	ROC (Joel Greenblatt) %		(Q: Mar. 2013 )
=	EBIT	/	Average of (Net fixed Assets	+	Net Working Capital)
=	EBIT	/	Average of (Property, Plant and Equipment	+	Net Working Capital)
			Q: Dec. 2012		Q: Mar. 2013
=	EBIT	/	( ( (Property, Plant and Equipment + Net Working Capital)	+	(Property, Plant and Equipment + Net Working Capital) )	/	count )
=	-10.004	/	( ( (0.132 + max(-1.253, 0))	+	(0.117 + max(-2.074, 0)) )	/	2 )
=	-10.004	/	( ( 0.132	+	0.117 )	/	2 )
=	-10.004	/	0.1245
=	-8,035.34 %

where Working Capital is:

	Working Capital		(Q: Dec. 2012 )
=	(Accounts Receivable	+	Total Inventories	+	Other Current Assets)	-	(Accounts Payable & Accrued Expense	+	Defer. Rev.	+	Other Current Liabilities)
=	(2.144	+	0	+	3.143)	-	(6.47	+	0	+	0.07)
=	-1.253

	Working Capital		(Q: Mar. 2013 )
=	(Accounts Receivable	+	Total Inventories	+	Other Current Assets)	-	(Accounts Payable & Accrued Expense	+	Defer. Rev.	+	Other Current Liabilities)
=	(1.78	+	0	+	3.202)	-	(6.981	+	0	+	0.075)
=	-2.074

When net working capital is negative, 0 is used.

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

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

Fortune Industries,'s Operating Margin % for the quarter that ended in Mar. 2013 is calculated as:

Operating Margin %	=	Operating Income (Q: Mar. 2013 )	/	Revenue (Q: Mar. 2013 )
	=	-2.503	/	11.494
	=	-21.78 %

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.

Fortune Industries, Operating Income Related Terms

Thank you for viewing the detailed overview of Fortune Industries,'s Operating Income provided by GuruFocus.com. Please click on the following links to see related term pages.

Fortune Industries, (FRA:FD9A) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Industrials » Business Services » Fortune Industries, Inc. (FRA:FD9A) » Definitions » Operating Income

Comparable Companies

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Address

Website

http://www.ffi.net

Fortune Industries Inc Fortune Industries, Inc. was incorporated in the state of Delaware in 1988, restructured in 2000 and redomesticated to the state of Indiana in May 2005. The Company provides full service human resources outsourcing services through co-employment relationships with their clients. Effective November 30, 2008, the Company approved the sale of all of the remaining operating subsidiaries within four of the five segments, as Wireless Infrastructure, Transportation Infrastructure, Ultraviolet Technologies, and Electronics Integration, to a related party. Consequently, as of the effective date of the transaction, the Business Solutions segment is the Company's remaining operating segment. The Business Solutions segment is comprised of Professional Employer Organizations (PEOs) which provide full-service human resources outsourcing services through co-employment relationships with their clients. Companies operating in the Business Solutions Segment include Professional Staff Management, Inc. and subsidiaries (PSM); CSM, Inc. and subsidiaries and related entities (CSM); Precision Employee Management, LLC (PEM); and Employer Solutions Group, Inc. and related entities (ESG). The Companies in the Business Solutions segment bill their clients under Professional Services Agreements as licensed PEOs. The billing includes amounts for the client's gross wages, payroll taxes, employee benefits, workers' compensation insurance and an administration fee. The administration fee charged by the companies in this segment is typically a percentage of the gross payroll and is sufficient to allow the companies in this segment to provide payroll administration services, human resources consulting services, worksite safety training, and employment regulatory compliance for no additional fees. The Companies in the Business Solutions segment compete with other PEOs, third-party payroll processing and human resources consulting companies, and in-house human resources divisions. The Company's Business Solutions segment is subject to various federal, state and local laws and regulations pertaining to various employee benefit plans, employee retirement plans, Section 125 cafeteria plans, group health plans, welfare benefit plans and health care flexible spending accounts.

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