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Compass Diversified Holdings's Operating Income for the three months ended in Dec. 2023 was $24 Mil. Its Operating Income for the trailing twelve months (TTM) ended in Dec. 2023 was $179 Mil.
Warning Sign:
Compass Diversified Holdings has recorded a loss in operating income at least once over the past 3 years.
Operating Margin % is calculated as Operating Income divided by its Revenue. Compass Diversified Holdings's Operating Income for the three months ended in Dec. 2023 was $24 Mil. Compass Diversified Holdings's Revenue for the three months ended in Dec. 2023 was $423 Mil. Therefore, Compass Diversified Holdings's Operating Margin % for the quarter that ended in Dec. 2023 was 5.79%.
Good Sign:
Compass Diversified Holdings operating margin is expanding. Margin expansion is usually a good sign.
Compass Diversified Holdings's 5-Year average Growth Rate for Operating Margin % was 16.70% per year.
Operating Income or EBIT is linked to Return on Capital for both regular definition and Joel Greenblatt's definition. Compass Diversified Holdings's annualized ROC % for the quarter that ended in Dec. 2023 was 3.05%. Compass Diversified Holdings's annualized ROC (Joel Greenblatt) % for the quarter that ended in Dec. 2023 was -12.53%.
The historical data trend for Compass Diversified Holdings'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.
Compass Diversified Holdings Annual Data | |||||||||||||||||||||
Trend | Dec14 | Dec15 | Dec16 | Dec17 | Dec18 | Dec19 | Dec20 | Dec21 | Dec22 | Dec23 | |||||||||||
Operating Income | Get a 7-Day Free Trial | 58.87 | 78.01 | 123.08 | 151.39 | 179.47 |
Compass Diversified Holdings Quarterly Data | ||||||||||||||||||||
Mar19 | Jun19 | Sep19 | Dec19 | Mar20 | Jun20 | Sep20 | Dec20 | Mar21 | Jun21 | Sep21 | Dec21 | Mar22 | Jun22 | Sep22 | Dec22 | Mar23 | Jun23 | Sep23 | Dec23 | |
Operating Income | Get a 7-Day Free Trial | 12.70 | 48.90 | 45.08 | 61.00 | 24.49 |
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. 2023 adds up the quarterly data reported by the company within the most recent 12 months, which was $179 Mil.
* 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.
Compass Diversified Holdings (NYSE:CODI) Operating Income Explanation
1. Operating Income or EBIT is linked to Return on Capital for both regular definition and Joel Greenblatt's definition.
Compass Diversified Holdings's annualized ROC % for the quarter that ended in Dec. 2023 is calculated as:
ROC % (Q: Dec. 2023 ) | ||||||
= | NOPAT | / | Average Invested Capital | |||
= | Operating Income * ( 1 - Tax Rate % ) | / | ( (Invested Capital (Q: Sep. 2023 ) | + | Invested Capital (Q: Dec. 2023 )) | / count ) |
= | 97.976 * ( 1 - -1.89% ) | / | ( (3437.551 | + | 3106.961) | / 2 ) |
= | 99.8277464 | / | 3272.256 | |||
= | 3.05 % |
where
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 | )) |
= | 3810.812 | - | 308.524 | - | ( 64.737 | - | max(0, 354.319 | - | 1315.437 | + | 64.737 | )) |
= | 3437.551 |
Invested Capital | (Q: Dec. 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 | )) |
= | 3816.981 | - | 259.543 | - | ( 450.477 | - | max(0, 312.358 | - | 1603.82 | + | 450.477 | )) |
= | 3106.961 |
Note: The Operating Income data used here is four times the quarterly (Dec. 2023) data.
2. Joel Greenblatt's definition of Return on Capital:
Compass Diversified Holdings's annualized ROC (Joel Greenblatt) % for the quarter that ended in Dec. 2023 is calculated as:
ROC (Joel Greenblatt) % | (Q: Dec. 2023 ) | ||||||
= | EBIT | / | Average of (Net fixed Assets | + | Net Working Capital) | ||
= | EBIT | / | Average of (Property, Plant and Equipment | + | Net Working Capital) | ||
Q: Sep. 2023 | Q: Dec. 2023 | ||||||
= | EBIT | / | ( ( (Property, Plant and Equipment + Net Working Capital) | + | (Property, Plant and Equipment + Net Working Capital) ) | / | count ) |
= | -134.86 | / | ( ( (203.512 + max(906.381, 0)) | + | (192.562 + max(850.985, 0)) ) | / | 2 ) |
= | -134.86 | / | ( ( 1109.893 | + | 1043.547 ) | / | 2 ) |
= | -134.86 | / | 1076.72 | ||||
= | -12.53 % |
where Working Capital is:
Working Capital | (Q: Sep. 2023 ) | ||||||||||
= | (Accounts Receivable | + | Total Inventories | + | Other Current Assets) | - | (Accounts Payable & Accrued Expense | + | Defer. Rev. | + | Other Current Liabilities) |
= | (349.839 | + | 801.887 | + | 98.974) | - | (308.524 | + | 0 | + | 35.795) |
= | 906.381 |
Working Capital | (Q: Dec. 2023 ) | ||||||||||
= | (Accounts Receivable | + | Total Inventories | + | Other Current Assets) | - | (Accounts Payable & Accrued Expense | + | Defer. Rev. | + | Other Current Liabilities) |
= | (318.241 | + | 740.387 | + | 94.715) | - | (259.543 | + | 7.35 | + | 35.465) |
= | 850.985 |
When net working capital is negative, 0 is used.
Note: The EBIT data used here is four times the quarterly (Dec. 2023) EBIT data.
3. Operating Income is also linked to Operating Margin %:
Compass Diversified Holdings's Operating Margin % for the quarter that ended in Dec. 2023 is calculated as:
Operating Margin % | = | Operating Income (Q: Dec. 2023 ) | / | Revenue (Q: Dec. 2023 ) |
= | 24.494 | / | 422.924 | |
= | 5.79 % |
* 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.
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.
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Ryan J Faulkingham | other: See Remark (a) | SIXTY ONE WILTON ROAD, SECOND FLOOR, WESTPORT CT 06880 |
Harold S Edwards | other: See Remark (a) | SIXTY ONE WILTON ROAD, SECOND FLOOR, WESTPORT CT 06880 |
Teri Shaffer | other: See Remark (a) | 301 RIVERSIDE AVENUE, SECOND FLOOR, WESTPORT CT 06880 |
Nancy Mahon | other: See Remark (a) | C/O TPG PACE BENEFICIAL FINANCE CORP., 301 COMMERCE STREET, SUITE 3300, FORT WORTH TX 76102 |
Alexander S. Bhathal | other: See Remark (a) | 301 RIVERSIDE AVENUE, SECOND FLOOR, WESTPORT CT 06880 |
James Bottiglieri | other: See Remark (a) | 2187 ATLANTIC ST, STAMFORD CT 06902 |
Larry L Enterline | other: See Remark (a) | 2709 WATER RIDGE PARKWAY, 2ND FLOOR, CHARLOTTE NC 28217 |
Gordon M Burns | other: See Remark (a) | AZTAR CORPORATION, 2390 E. CAMELBACK RD., SUITE 400, PHOENIX AZ 85016 |
Compass Group Investments, Ltd. | 10 percent owner | BELVEDERE BUILDING, 69 PITTS BAY ROAD, HAMILTON HM 08 D0 00000 |
Patrick A Maciariello | other: See Remarks (a) | 301 RIVERSIDE AVENUE, SECOND FLOOR, WESTPORT CT 06880 |
Elias Sabo | other: See Remarks (a) | 2709 WATER RIDGE PARKWAY, 2ND FLOOR, CHARLOTTE NC 28217 |
Simon Heidi Locke | other: See Remark (a) | 26 KENSETT LANE, DARIEN CT 06820 |
Sarah Gaines Mccoy | other: See Remark (a) | 6300 MERRILL CREEK PARKWAY, SUITE B, EVERETT WA 98203-5862 |
C Sean Day | other: See Remark (a) | |
D Eugene Ewing | other: See Remark (a) | SIXTY ONE WILTON ROAD, SECOND FLOOR, WESTPORT CT 06880 |
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