Merit Group (LSE:MRIT) Operating Income : £-2.22 Mil (TTM As of Sep. 2023)

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What is Merit Group Operating Income?

Merit Group's Operating Income for the six months ended in Sep. 2023 was £0.87 Mil. Its Operating Income for the trailing twelve months (TTM) ended in Sep. 2023 was £-2.22 Mil.

Warning Sign:

Merit Group PLC has never been profitable in the past 3 years. It lost money every year.

Operating Margin % is calculated as Operating Income divided by its Revenue. Merit Group's Operating Income for the six months ended in Sep. 2023 was £0.87 Mil. Merit Group's Revenue for the six months ended in Sep. 2023 was £9.90 Mil. Therefore, Merit Group's Operating Margin % for the quarter that ended in Sep. 2023 was 8.77%.

Merit Group'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. Merit Group's annualized ROC % for the quarter that ended in Sep. 2023 was 2.63%. Merit Group's annualized ROC (Joel Greenblatt) % for the quarter that ended in Sep. 2023 was 72.42%.

Merit Group Operating Income Historical Data

The historical data trend for Merit Group'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.

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Merit Group Operating Income Chart

Merit Group Annual Data

Trend

Mar14

Mar15

Mar16

Mar17

Mar18

Mar19

Mar20

Mar21

Mar22

Mar23

Operating Income

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-1.44

0.13

-3.19

-1.41

-3.66

Merit Group Semi-Annual Data
	Mar14	Sep14	Mar15	Sep15	Mar16	Sep16	Mar17	Sep17	Mar18	Sep18	Mar19	Sep19	Mar20	Sep20	Mar21	Sep21	Mar22	Sep22	Mar23	Sep23
Operating Income	Get a 7-Day Free Trial															0.08	-1.49	-0.57	-3.09	0.87

Merit Group 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. 2023 adds up the semi-annually data reported by the company within the most recent 12 months, which was £-2.22 Mil.

Merit Group (LSE:MRIT) Operating Income Explanation

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

Merit Group's annualized ROC % for the quarter that ended in Sep. 2023 is calculated as:

	ROC % (Q: Sep. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Mar. 2023 )	+	Invested Capital (Q: Sep. 2023 ))	/ count )
=	1.736 * ( 1 - 33.27% )	/	( (46.903	+	41.306)	/ 2 )
=	1.1584328	/	44.1045
=	2.63 %

where

	Invested Capital		(Q: Mar. 2023 )
=	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	))
=	45.322	-	1.548	-	( 2.144	-	max(0, 10.775	-	7.646	+	2.144	))
=	46.903

	Invested Capital		(Q: Sep. 2023 )
=	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	))
=	44.294	-	6.085	-	( 1.069	-	max(0, 9.669	-	6.572	+	1.069	))
=	41.306

Note: The Operating Income data used here is two times the semi-annual (Sep. 2023) data.

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

Merit Group's annualized ROC (Joel Greenblatt) % for the quarter that ended in Sep. 2023 is calculated as:

	ROC (Joel Greenblatt) %		(Q: Sep. 2023 )
=	EBIT	/	Average of (Net fixed Assets	+	Net Working Capital)
=	EBIT	/	Average of (Property, Plant and Equipment	+	Net Working Capital)
			Q: Mar. 2023		Q: Sep. 2023
=	EBIT	/	( ( (Property, Plant and Equipment + Net Working Capital)	+	(Property, Plant and Equipment + Net Working Capital) )	/	count )
=	1.736	/	( ( (2.215 + max(-2.674, 0))	+	(2.579 + max(-0.659, 0)) )	/	2 )
=	1.736	/	( ( 2.215	+	2.579 )	/	2 )
=	1.736	/	2.397
=	72.42 %

where Working Capital is:

	Working Capital		(Q: Mar. 2023 )
=	(Accounts Receivable	+	Total Inventories	+	Other Current Assets)	-	(Accounts Payable & Accrued Expense	+	Defer. Rev.	+	Other Current Liabilities)
=	(3.6	+	0	+	0.45)	-	(1.548	+	0	+	5.176)
=	-2.674

	Working Capital		(Q: Sep. 2023 )
=	(Accounts Receivable	+	Total Inventories	+	Other Current Assets)	-	(Accounts Payable & Accrued Expense	+	Defer. Rev.	+	Other Current Liabilities)
=	(5.503	+	0	+	0)	-	(6.085	+	0	+	0.077)
=	-0.659

When net working capital is negative, 0 is used.

Note: The EBIT data used here is two times the semi-annual (Sep. 2023) EBIT data.

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

Merit Group's Operating Margin % for the quarter that ended in Sep. 2023 is calculated as:

Operating Margin %	=	Operating Income (Q: Sep. 2023 )	/	Revenue (Q: Sep. 2023 )
	=	0.868	/	9.899
	=	8.77 %

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.

Merit Group Operating Income Related Terms

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Merit Group (LSE:MRIT) Business Description

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Address

32 London Bridge Street, 9th Floor, The Shard, London, GBR, SE1 9SG

Website

https://www.meritgroupplc.com

Merit Group PLC provides data, business, and political intelligence. The group operates through two operating segments namely, Dods and Merit Data and Technology. Dods business segment concentrates on the provision of key information and insights into the political and public policy environments around the UK and the European Union. The Merit Data and Technology segment focuses on the fields of data engineering, machine learning, and artificial intelligence. The company generates the majority of its revenue from Merit Data & Technology segment.

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