Health Management Associates, (FRA:HMG) Operating Income : €-16 Mil (TTM As of Sep. 2013)

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What is Health Management Associates, Operating Income?

Health Management Associates,'s Operating Income for the three months ended in Sep. 2013 was €-104 Mil. Its Operating Income for the trailing twelve months (TTM) ended in Sep. 2013 was €-16 Mil.

Operating Margin % is calculated as Operating Income divided by its Revenue. Health Management Associates,'s Operating Income for the three months ended in Sep. 2013 was €-104 Mil. Health Management Associates,'s Revenue for the three months ended in Sep. 2013 was €1,063 Mil. Therefore, Health Management Associates,'s Operating Margin % for the quarter that ended in Sep. 2013 was -9.77%.

Health Management Associates,'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. Health Management Associates,'s annualized ROC % for the quarter that ended in Sep. 2013 was -5.03%. Health Management Associates,'s annualized ROC (Joel Greenblatt) % for the quarter that ended in Sep. 2013 was -13.10%.

Health Management Associates, Operating Income Historical Data

The historical data trend for Health Management Associates,'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.

Health Management Associates, Operating Income Chart

Health Management Associates, Annual Data

Trend

Sep03

Sep04

Sep05

Dec06

Dec07

Dec08

Dec09

Dec10

Dec11

Dec12

Operating Income

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290.34

302.45

370.21

232.13

208.87

Health Management Associates, Quarterly Data
	Dec08	Mar09	Jun09	Sep09	Dec09	Mar10	Jun10	Sep10	Dec10	Mar11	Jun11	Sep11	Dec11	Mar12	Jun12	Sep12	Dec12	Mar13	Jun13	Sep13
Operating Income	Get a 7-Day Free Trial															53.30	49.94	31.47	6.91	-103.86

Health Management Associates, 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 Sep. 2013 adds up the quarterly data reported by the company within the most recent 12 months, which was €-16 Mil.

Health Management Associates, (FRA:HMG) Operating Income Explanation

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

Health Management Associates,'s annualized ROC % for the quarter that ended in Sep. 2013 is calculated as:

	ROC % (Q: Sep. 2013 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Jun. 2013 )	+	Invested Capital (Q: Sep. 2013 ))	/ count )
=	-415.456 * ( 1 - 47.18% )	/	( (4365.419	+	4360.321)	/ 2 )
=	-219.4438592	/	4362.87
=	-5.03 %

where

	Invested Capital		(Q: Jun. 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	))
=	4962.826	-	532.284	-	( 65.123	-	max(0, 632.136	-	1057.684	+	65.123	))
=	4365.419

	Invested Capital		(Q: Sep. 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	))
=	4955.427	-	547.046	-	( 48.06	-	max(0, 637.516	-	1094.067	+	48.06	))
=	4360.321

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

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

Health Management Associates,'s annualized ROC (Joel Greenblatt) % for the quarter that ended in Sep. 2013 is calculated as:

	ROC (Joel Greenblatt) %		(Q: Sep. 2013 )
=	EBIT	/	Average of (Net fixed Assets	+	Net Working Capital)
=	EBIT	/	Average of (Property, Plant and Equipment	+	Net Working Capital)
			Q: Jun. 2013		Q: Sep. 2013
=	EBIT	/	( ( (Property, Plant and Equipment + Net Working Capital)	+	(Property, Plant and Equipment + Net Working Capital) )	/	count )
=	-415.456	/	( ( (2726.694 + max(438.922, 0))	+	(2685.942 + max(491.354, 0)) )	/	2 )
=	-415.456	/	( ( 3165.616	+	3177.296 )	/	2 )
=	-415.456	/	3171.456
=	-13.10 %

where Working Capital is:

	Working Capital		(Q: Jun. 2013 )
=	(Accounts Receivable	+	Total Inventories	+	Other Current Assets)	-	(Accounts Payable & Accrued Expense	+	Defer. Rev.	+	Other Current Liabilities)
=	(738.916	+	172.941	+	80.704)	-	(532.284	+	21.356	+	-0.00099999999997635)
=	438.922

	Working Capital		(Q: Sep. 2013 )
=	(Accounts Receivable	+	Total Inventories	+	Other Current Assets)	-	(Accounts Payable & Accrued Expense	+	Defer. Rev.	+	Other Current Liabilities)
=	(725.659	+	169.461	+	150.887)	-	(547.046	+	7.606	+	0.00099999999986267)
=	491.354

When net working capital is negative, 0 is used.

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

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

Health Management Associates,'s Operating Margin % for the quarter that ended in Sep. 2013 is calculated as:

Operating Margin %	=	Operating Income (Q: Sep. 2013 )	/	Revenue (Q: Sep. 2013 )
	=	-103.864	/	1063.09
	=	-9.77 %

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.

Health Management Associates, Operating Income Related Terms

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

Health Management Associates, (FRA:HMG) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Healthcare » Healthcare Providers & Services » Health Management Associates, Inc. (FRA:HMG) » Definitions » Operating Income

Comparable Companies

Traded in Other Exchanges

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Address

Website

http://www.hma-corp.com

Health Management Associates, Inc. was incorporated in Delaware in 1979 but began operations through a subsidiary that was formed in 1977. It became a public company in 1991. As of December 31, 2011, it operated 66 hospitals with a total of 10,330 licensed beds in Alabama, Arkansas, Florida, Georgia, Kentucky, Mississippi, Missouri, North Carolina, Oklahoma, Pennsylvania, South Carolina, Tennessee, Texas, Washington and West Virginia. The Company and its subsidiaries provide health care services to patients in owned and leased facilities located mainly in non-urban communities in the southeastern and southwestern United States. Services provided by its hospitals include general surgery, internal medicine, obstetrics, emergency room care, radiology, oncology, diagnostic care, coronary care and pediatric services. It also provides outpatient services such as one-day surgery, laboratory, x-ray, respiratory therapy, cardiology and physical therapy. Additionally, some of the Company's hospitals provide specialty services in, among other areas, cardiology e.g., open-heart surgery, etc., neuro-surgery, oncology, radiation therapy, computer-assisted tomography 'CT' scanning, magnetic resonance imaging 'MRI', lithotripsy and full-service obstetrics.The Company's strategy is to deliver health care services and improve patient and physician satisfaction, improve operations of its hospitals, utilize efficient management and acquire strategic hospitals in non-urban communities. In many of the geographic areas where it operates, there are other hospitals that provide services comparable to those offered by its hospitals. The Company is subject to compliance with various federal, state and local environmental laws, rules and regulations, including, but not limited to, the disposal of medical waste generated by its operations.

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