China Chaintek United Co (LSE:CTEK) Operating Income : £21.38 Mil (TTM As of Jun. 2015)

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What is China Chaintek United Co Operating Income?

China Chaintek United Co's Operating Income for the six months ended in Jun. 2015 was £6.64 Mil. Its Operating Income for the trailing twelve months (TTM) ended in Jun. 2015 was £21.38 Mil.

Operating Margin % is calculated as Operating Income divided by its Revenue. China Chaintek United Co's Operating Income for the six months ended in Jun. 2015 was £6.64 Mil. China Chaintek United Co's Revenue for the six months ended in Jun. 2015 was £13.45 Mil. Therefore, China Chaintek United Co's Operating Margin % for the quarter that ended in Jun. 2015 was 49.40%.

China Chaintek United Co'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. China Chaintek United Co's annualized ROC % for the quarter that ended in Jun. 2015 was 18.51%. China Chaintek United Co's annualized ROC (Joel Greenblatt) % for the quarter that ended in Jun. 2015 was 84.68%.

China Chaintek United Co Operating Income Historical Data

The historical data trend for China Chaintek United Co'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.

China Chaintek United Co Operating Income Chart

China Chaintek United Co Annual Data

Trend

Dec09

Dec10

Dec11

Dec12

Dec13

Dec14

Operating Income

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13.30

20.19

25.18

28.61

29.67

China Chaintek United Co Semi-Annual Data
	Dec11	Jun12	Dec12	Jun13	Dec13	Jun14	Dec14	Jun15
Operating Income	Get a 7-Day Free Trial			13.97	15.28	13.72	14.74	6.64

China Chaintek United Co 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. 2015 adds up the semi-annually data reported by the company within the most recent 12 months, which was £21.38 Mil.

China Chaintek United Co (LSE:CTEK) Operating Income Explanation

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

China Chaintek United Co's annualized ROC % for the quarter that ended in Jun. 2015 is calculated as:

	ROC % (Q: Jun. 2015 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Dec. 2014 )	+	Invested Capital (Q: Jun. 2015 ))	/ count )
=	13.284 * ( 1 - 25.64% )	/	( (53.469	+	53.235)	/ 2 )
=	9.8779824	/	53.352
=	18.51 %

where

	Invested Capital		(Q: Dec. 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	))
=	103.84	-	1.618	-	( 48.753	-	max(0, 2.56	-	58.789	+	48.753	))
=	53.469

	Invested Capital		(Q: Jun. 2015 )
=	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	))
=	108.305	-	1.884	-	( 53.186	-	max(0, 1.884	-	61.976	+	53.186	))
=	53.235

Note: The Operating Income data used here is two times the semi-annual (Jun. 2015) data.

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

China Chaintek United Co's annualized ROC (Joel Greenblatt) % for the quarter that ended in Jun. 2015 is calculated as:

	ROC (Joel Greenblatt) %		(Q: Jun. 2015 )
=	EBIT	/	Average of (Net fixed Assets	+	Net Working Capital)
=	EBIT	/	Average of (Property, Plant and Equipment	+	Net Working Capital)
			Q: Dec. 2014		Q: Jun. 2015
=	EBIT	/	( ( (Property, Plant and Equipment + Net Working Capital)	+	(Property, Plant and Equipment + Net Working Capital) )	/	count )
=	13.284	/	( ( (7.844 + max(7.476, 0))	+	(9.149 + max(6.906, 0)) )	/	2 )
=	13.284	/	( ( 15.32	+	16.055 )	/	2 )
=	13.284	/	15.6875
=	84.68 %

where Working Capital is:

	Working Capital		(Q: Dec. 2014 )
=	(Accounts Receivable	+	Total Inventories	+	Other Current Assets)	-	(Accounts Payable & Accrued Expense	+	Defer. Rev.	+	Other Current Liabilities)
=	(8.814	+	0	+	1.222)	-	(1.618	+	0	+	0.942)
=	7.476

	Working Capital		(Q: Jun. 2015 )
=	(Accounts Receivable	+	Total Inventories	+	Other Current Assets)	-	(Accounts Payable & Accrued Expense	+	Defer. Rev.	+	Other Current Liabilities)
=	(0	+	0	+	8.79)	-	(1.884	+	0	+	0)
=	6.906

When net working capital is negative, 0 is used.

Note: The EBIT data used here is two times the semi-annual (Jun. 2015) EBIT data.

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

China Chaintek United Co's Operating Margin % for the quarter that ended in Jun. 2015 is calculated as:

Operating Margin %	=	Operating Income (Q: Jun. 2015 )	/	Revenue (Q: Jun. 2015 )
	=	6.642	/	13.445
	=	49.40 %

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.

China Chaintek United Co Operating Income Related Terms

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China Chaintek United Co (LSE:CTEK) Business Description

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Address

Website

http://www.chaintek-united.com

China Chaintek United Co Ltd was incorporated on April 13, 2011. The Company and its subsidiaries is a logistics distribution providers for sports shoe and apparel manufacturers in the People's Republic of China.Â The Company's business segments areÂ Logistics services, Inventory solutions andÂ Corporate. The Logistics services includes theÂ provision of land transportation services, Inventory solutions includes the provision of warehousing services andÂ Corporate includes investment holdings and Corporate Office which incurs general corporate expenses.