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Gouverneur Bancorp Inc  (OTCPK:GOVB) Operating Margin %: 28.09% (As of Jun. 2008)

Operating Margin % is calculated as Operating Income divided by its Revenue. Gouverneur Bancorp Inc's Operating Income for the three months ended in Jun. 2008 was $0.35 Mil. Gouverneur Bancorp Inc's Revenue for the three months ended in Jun. 2008 was $1.23 Mil. Therefore, Gouverneur Bancorp Inc's Operating Margin % for the quarter that ended in Jun. 2008 was 28.09%.



Gouverneur Bancorp Inc's 5-Year Average operating margin Growth Rate was 0.00% per year.

Gouverneur Bancorp Inc's Operating Income for the three months ended in Jun. 2008 was $0.35 Mil. Its operating income for the trailing twelve months (TTM) ended in Jun. 2008 was $1.49 Mil.


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

* Premium members only.

Gouverneur Bancorp Inc Annual Data

Sep98 Sep99 Sep00 Sep01 Sep02 Sep03 Sep04 Sep05 Sep06 Sep07
Operating Margin % Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 25.99 33.57 31.76 36.25 29.49

Gouverneur Bancorp Inc Quarterly Data

Sep03 Dec03 Mar04 Jun04 Sep04 Dec04 Mar05 Jun05 Sep05 Dec05 Mar06 Jun06 Sep06 Dec06 Mar07 Jun07 Sep07 Dec07 Mar08 Jun08
Operating Margin % Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 32.36 34.97 30.11 28.44 28.09

Competitive Comparison
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap.


Calculation

Operating margin - also known as operating income margin, operating profit margin and return on sales (ROS) - is the ratio of Operating Income divided by net sales or Revenue, usually presented in percent.

Gouverneur Bancorp Inc's Operating Margin for the fiscal year that ended in Sep. 2007 is calculated as

Operating Margin %=Operating Income (A: Sep. 2007 ) / Revenue (A: Sep. 2007 )
=1.461 / 4.954
=29.49 %

Gouverneur Bancorp Inc's Operating Margin for the quarter that ended in Jun. 2008 is calculated as

Operating Margin %=Operating Income (Q: Jun. 2008 ) / Revenue (Q: Jun. 2008 )
=0.345 / 1.228
=28.09 %

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.


Explanation

Just like Gross Margin %, it is important to see a company maintains its operating margin over time. Among the same industry, a company with higher operating margin is more efficient in its operation. It is also more stable during industry slowdown or recessions. Peter Lynch prefers those with higher margins than those with lower margins.


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.


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