Sphere Medical Holding (LSE:SPHR) Operating Income : £-5.14 Mil (TTM As of Dec. 2016)

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What is Sphere Medical Holding Operating Income?

Sphere Medical Holding's Operating Income for the six months ended in Dec. 2016 was £-2.50 Mil. Its Operating Income for the trailing twelve months (TTM) ended in Dec. 2016 was £-5.14 Mil.

Operating Margin % is calculated as Operating Income divided by its Revenue. Sphere Medical Holding's Operating Income for the six months ended in Dec. 2016 was £-2.50 Mil. Sphere Medical Holding's Revenue for the six months ended in Dec. 2016 was £0.02 Mil. Therefore, Sphere Medical Holding's Operating Margin % for the quarter that ended in Dec. 2016 was -10,408.33%.

Good Sign:

Sphere Medical Holding PLC operating margin is expanding. Margin expansion is usually a good sign.

Sphere Medical Holding's 5-Year average Growth Rate for Operating Margin % was 15.30% per year.

Operating Income or EBIT is linked to Return on Capital for both regular definition and Joel Greenblatt's definition. Sphere Medical Holding's annualized ROC % for the quarter that ended in Dec. 2016 was -185.93%. Sphere Medical Holding's annualized ROC (Joel Greenblatt) % for the quarter that ended in Dec. 2016 was -2,479.40%.

Sphere Medical Holding Operating Income Historical Data

The historical data trend for Sphere Medical Holding'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.

Sphere Medical Holding Operating Income Chart

Sphere Medical Holding Annual Data

Trend

Dec08

Dec09

Dec10

Dec11

Dec12

Dec13

Dec14

Dec15

Dec16

Operating Income

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-8.02

-5.66

-5.94

-6.11

-5.14

Sphere Medical Holding Semi-Annual Data
	Dec11	Jun12	Dec12	Jun13	Dec13	Jun14	Dec14	Jun15	Dec15	Jun16	Dec16
Operating Income	Get a 7-Day Free Trial						-2.89	-3.49	-2.63	-2.64	-2.50

Sphere Medical Holding 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 Dec. 2016 adds up the semi-annually data reported by the company within the most recent 12 months, which was £-5.14 Mil.

Sphere Medical Holding (LSE:SPHR) Operating Income Explanation

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

Sphere Medical Holding's annualized ROC % for the quarter that ended in Dec. 2016 is calculated as:

	ROC % (Q: Dec. 2016 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Jun. 2016 )	+	Invested Capital (Q: Dec. 2016 ))	/ count )
=	-4.996 * ( 1 - 0% )	/	( (2.244	+	3.13)	/ 2 )
=	-4.996	/	2.687
=	-185.93 %

where

	Invested Capital		(Q: Jun. 2016 )
=	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	))
=	9.464	-	0.823	-	( 6.637	-	max(0, 0.823	-	7.22	+	6.637	))
=	2.244

	Invested Capital		(Q: Dec. 2016 )
=	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	))
=	6.966	-	0.744	-	( 3.241	-	max(0, 0.757	-	3.849	+	3.241	))
=	3.13

Note: The Operating Income data used here is two times the semi-annual (Dec. 2016) data.

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

Sphere Medical Holding's annualized ROC (Joel Greenblatt) % for the quarter that ended in Dec. 2016 is calculated as:

	ROC (Joel Greenblatt) %		(Q: Dec. 2016 )
=	EBIT	/	Average of (Net fixed Assets	+	Net Working Capital)
=	EBIT	/	Average of (Property, Plant and Equipment	+	Net Working Capital)
			Q: Jun. 2016		Q: Dec. 2016
=	EBIT	/	( ( (Property, Plant and Equipment + Net Working Capital)	+	(Property, Plant and Equipment + Net Working Capital) )	/	count )
=	-4.996	/	( ( (0.214 + max(-0.39, 0))	+	(0.189 + max(-0.306, 0)) )	/	2 )
=	-4.996	/	( ( 0.214	+	0.189 )	/	2 )
=	-4.996	/	0.2015
=	-2,479.40 %

where Working Capital is:

	Working Capital		(Q: Jun. 2016 )
=	(Accounts Receivable	+	Total Inventories	+	Other Current Assets)	-	(Accounts Payable & Accrued Expense	+	Defer. Rev.	+	Other Current Liabilities)
=	(0	+	0.433	+	0)	-	(0.823	+	0	+	0)
=	-0.39

	Working Capital		(Q: Dec. 2016 )
=	(Accounts Receivable	+	Total Inventories	+	Other Current Assets)	-	(Accounts Payable & Accrued Expense	+	Defer. Rev.	+	Other Current Liabilities)
=	(0.024	+	0.427	+	0)	-	(0.744	+	0	+	0.013)
=	-0.306

When net working capital is negative, 0 is used.

Note: The EBIT data used here is two times the semi-annual (Dec. 2016) EBIT data.

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

Sphere Medical Holding's Operating Margin % for the quarter that ended in Dec. 2016 is calculated as:

Operating Margin %	=	Operating Income (Q: Dec. 2016 )	/	Revenue (Q: Dec. 2016 )
	=	-2.498	/	0.024
	=	-10,408.33 %

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.

Sphere Medical Holding Operating Income Related Terms

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Sphere Medical Holding (LSE:SPHR) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Healthcare » Medical Devices & Instruments » Sphere Medical Holding PLC (LSE:SPHR) » Definitions » Operating Income

Comparable Companies

Traded in Other Exchanges

N/A

Address

Harston Mill, Harston, Cambridge, GBR, CB22 7GG

Website

http://www.spheremedical.com

Sphere Medical Holding Ltd is a UK-based company which is engaged in research and development, manufacturing and sale of medical monitoring and diagnostic equipment within the medical device area. It focuses on developing the Proxima platform for measuring blood gases, electrolytes and metabolites. Proxima is an in-line patient dedicated arterial blood analyser which supports frequent measurements at critical times. It markets its product (Proxima) to critical care market which includes ICU (Intensive Care Unit) and OR (Operating Room). The company's products are used in medical applications, enabling faster clinical decision-making and improved patient outcomes. It operates is business in single reporting segment of Medical devices. Most of the company's revenue comes from Europe.