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AECOM Technology Corp (NYSE:ACM)
Gross Profit
$403 Mil (TTM As of Sep. 2014)

AECOM Technology Corp's gross profit for the three months ended in Sep. 2014 was $129 Mil. AECOM Technology Corp's gross profit for the trailing twelve months (TTM) ended in Sep. 2014 was $403 Mil.

Gross Margin is calculated as gross profit divided by its revenue. AECOM Technology Corp's gross profit for the three months ended in Sep. 2014 was $129 Mil. AECOM Technology Corp's revenue for the three months ended in Sep. 2014 was $2,563 Mil. Therefore, AECOM Technology Corp's Gross Margin for the quarter that ended in Sep. 2014 was 5.04%.

AECOM Technology Corp had a gross margin of 5.04% for the quarter that ended in Sep. 2014 => No sustainable competitive advantage

During the past 13 years, the highest Gross Margin of AECOM Technology Corp was 28.28%. The lowest was 4.82%. And the median was 6.19%.

Warning Sign:

AECOM Technology Corp gross margin has been in long term decline. The average rate of decline per year is -4.3%.


Definition

Gross Profit is the different between the sale prices and the cost of buying or producing the goods.

AECOM Technology Corp's Gross Profit for the fiscal year that ended in Sep. 2014 is calculated as

Gross Profit (A: Sep. 2014 )=Revenue - Cost of Goods Sold
=8356.783 - 7953.607
=403

AECOM Technology Corp's Gross Profit for the quarter that ended in Sep. 2014 is calculated as

Gross Profit (Q: Sep. 2014 )=Revenue - Cost of Goods Sold
=2562.529 - 2433.498
=129

AECOM Technology Corp Gross Profit for the trailing twelve months (TTM) ended in Sep. 2014 was 78.198 (Dec. 2013 ) + 87.407 (Mar. 2014 ) + 108.54 (Jun. 2014 ) + 129.031 (Sep. 2014 ) = $403 Mil.

Gross Profit is the numerator in the calculation of Gross Margin:

AECOM Technology Corp's Gross Margin for the quarter that ended in Sep. 2014 is calculated as

Gross Margin (Q: Sep. 2014 )=Gross Profit (Q: Sep. 2014 ) / Revenue (Q: Sep. 2014 )
=(Revenue - Cost of Goods Sold) / Revenue
=129 / 2562.529
=5.04 %

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

A positive Gross Profit is only the first step for a company to make a net profit. The gross profit needs to be big enough to also cover related labor, equipment, rental, marketing/advertising, research and development and a lot of other costs in selling the products.


Explanation

Warren Buffett believes that firms with excellent long term economics tend to have consistently higher margins.

Durable competitive advantage creates a high Gross Margin because of the freedom to price in excess of cost. Companies can be categorized by their Gross Margin

1. Greater than 40% = Durable competitive advantage
2. Less than 40% = Competition eroding margins
3. Less than 20% = no sustainable competitive advantage
Consistency of Gross Margin is key

AECOM Technology Corp had a gross margin of 5.04% for the quarter that ended in Sep. 2014 => No sustainable competitive advantage


Related Terms

Cost of Goods Sold, Gross Margin, Revenue


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

AECOM Technology Corp Annual Data

Sep05Sep06Sep07Sep08Sep09Sep10Sep11Sep12Sep13Sep14
Gross_Profit 6779061,161287351430467422450403

AECOM Technology Corp Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
Gross_Profit 111144781001321407887109129
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