African Minerals (LSE:AMI) Operating Income : £-19.6 Mil (TTM As of Jun. 2014)

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What is African Minerals Operating Income?

African Minerals's Operating Income for the six months ended in Jun. 2014 was £-50.3 Mil. Its Operating Income for the trailing twelve months (TTM) ended in Jun. 2014 was £-19.6 Mil.

Operating Margin % is calculated as Operating Income divided by its Revenue. African Minerals's Operating Income for the six months ended in Jun. 2014 was £-50.3 Mil. African Minerals's Revenue for the six months ended in Jun. 2014 was £235.9 Mil. Therefore, African Minerals's Operating Margin % for the quarter that ended in Jun. 2014 was -21.32%.

African Minerals'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. African Minerals's annualized ROC % for the quarter that ended in Jun. 2014 was 5.75%. African Minerals's annualized ROC (Joel Greenblatt) % for the quarter that ended in Jun. 2014 was 5.61%.

African Minerals Operating Income Historical Data

The historical data trend for African Minerals'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.

African Minerals Operating Income Chart

African Minerals Annual Data

Trend

Dec04

Dec05

Dec06

Dec07

Dec08

Dec09

Dec10

Dec11

Dec12

Dec13

Operating Income

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-11.79

-21.77

-23.95

-21.11

23.30

African Minerals Semi-Annual Data
	Jun10	Dec10	Jun11	Dec11	Jun12	Dec12	Jun13	Dec13	Jun14
Operating Income	Get a 7-Day Free Trial				-76.75	52.77	-7.80	30.68	-50.29

African Minerals 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 Jun. 2014 adds up the semi-annually data reported by the company within the most recent 12 months, which was £-19.6 Mil.

African Minerals (LSE:AMI) Operating Income Explanation

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

African Minerals's annualized ROC % for the quarter that ended in Jun. 2014 is calculated as:

	ROC % (Q: Jun. 2014 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Dec. 2013 )	+	Invested Capital (Q: Jun. 2014 ))	/ count )
=	-100.588 * ( 1 - 220.85% )	/	( (2205.455	+	2020.097)	/ 2 )
=	121.560598	/	2112.776
=	5.75 %

where

	Invested Capital		(Q: Dec. 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	))
=	1973.167	-	62.281	-	( 221.064	-	max(0, 666.73	-	372.161	+	221.064	))
=	2205.455

	Invested Capital		(Q: Jun. 2014 )
=	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	))
=	1863.187	-	134.216	-	( 196.094	-	max(0, 604.652	-	313.526	+	196.094	))
=	2020.097

Note: The Operating Income data used here is two times the semi-annual (Jun. 2014) data.

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

African Minerals's annualized ROC (Joel Greenblatt) % for the quarter that ended in Jun. 2014 is calculated as:

	ROC (Joel Greenblatt) %		(Q: Jun. 2014 )
=	EBIT	/	Average of (Net fixed Assets	+	Net Working Capital)
=	EBIT	/	Average of (Property, Plant and Equipment	+	Net Working Capital)
			Q: Dec. 2013		Q: Jun. 2014
=	EBIT	/	( ( (Property, Plant and Equipment + Net Working Capital)	+	(Property, Plant and Equipment + Net Working Capital) )	/	count )
=	84.04	/	( ( (1524.085 + max(-354.715, 0))	+	(1469.462 + max(-315.475, 0)) )	/	2 )
=	84.04	/	( ( 1524.085	+	1469.462 )	/	2 )
=	84.04	/	1496.7735
=	5.61 %

where Working Capital is:

	Working Capital		(Q: Dec. 2013 )
=	(Accounts Receivable	+	Total Inventories	+	Other Current Assets)	-	(Accounts Payable & Accrued Expense	+	Defer. Rev.	+	Other Current Liabilities)
=	(77.043	+	49.715	+	24.339)	-	(62.281	+	0	+	443.531)
=	-354.715

	Working Capital		(Q: Jun. 2014 )
=	(Accounts Receivable	+	Total Inventories	+	Other Current Assets)	-	(Accounts Payable & Accrued Expense	+	Defer. Rev.	+	Other Current Liabilities)
=	(0	+	48.758	+	68.674)	-	(134.216	+	0	+	298.691)
=	-315.475

When net working capital is negative, 0 is used.

Note: The EBIT data used here is two times the semi-annual (Jun. 2014) EBIT data.

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

African Minerals's Operating Margin % for the quarter that ended in Jun. 2014 is calculated as:

Operating Margin %	=	Operating Income (Q: Jun. 2014 )	/	Revenue (Q: Jun. 2014 )
	=	-50.294	/	235.927
	=	-21.32 %

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.

African Minerals Operating Income Related Terms

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African Minerals (LSE:AMI) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Basic Materials » Metals & Mining » African Minerals Ltd (LSE:AMI) » Definitions » Operating Income

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Address

Stratton House, 5 Stratton Street, London, GBR, W1J 8LA

Website

http://www.african-minerals.com

African Minerals Ltd is a mineral exploration and development company. It is engaged in the development, design, construction, and operation of iron ore deposit at Tonkolili, Sierra Leone, and its related rail and port infrastructure. In addition, it is also involved in the marketing and sale of the iron ore produced from this project.

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