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Apartment Investment & Management Co (NYSE:AIV)
Gross Profit
$612.9 Mil (TTM As of Sep. 2015)

Apartment Investment & Management Co's gross profit for the three months ended in Sep. 2015 was $155.9 Mil. Apartment Investment & Management Co's gross profit for the trailing twelve months (TTM) ended in Sep. 2015 was $612.9 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Apartment Investment & Management Co's gross profit for the three months ended in Sep. 2015 was $155.9 Mil. Apartment Investment & Management Co's revenue for the three months ended in Sep. 2015 was $246.4 Mil. Therefore, Apartment Investment & Management Co's Gross Margin for the quarter that ended in Sep. 2015 was 63.26%.

Apartment Investment & Management Co had a gross margin of 63.26% for the quarter that ended in Sep. 2015 => Durable competitive advantage

During the past 13 years, the highest Gross Margin of Apartment Investment & Management Co was 98.03%. The lowest was 53.80%. And the median was 58.71%.


Definition

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

Apartment Investment & Management Co's Gross Profit for the fiscal year that ended in Dec. 2014 is calculated as

Gross Profit (A: Dec. 2014 )=Revenue - Cost of Goods Sold
=984.363 - 380.626
=603.7

Apartment Investment & Management Co's Gross Profit for the quarter that ended in Sep. 2015 is calculated as

Gross Profit (Q: Sep. 2015 )=Revenue - Cost of Goods Sold
=246.387 - 90.526
=155.9

Apartment Investment & Management Co Gross Profit for the trailing twelve months (TTM) ended in Sep. 2015 was 154.112 (Dec. 2014 ) + 147.17 (Mar. 2015 ) + 155.767 (Jun. 2015 ) + 155.861 (Sep. 2015 ) = $612.9 Mil.

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

Apartment Investment & Management Co's Gross Margin for the quarter that ended in Sep. 2015 is calculated as

Gross Margin (Q: Sep. 2015 )=Gross Profit (Q: Sep. 2015 ) / Revenue (Q: Sep. 2015 )
=(Revenue - Cost of Goods Sold) / Revenue
=155.9 / 246.387
=63.26 %

* 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

Apartment Investment & Management Co had a gross margin of 63.26% for the quarter that ended in Sep. 2015 => Durable 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.

Apartment Investment & Management Co Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
Gross_Profit 0.01,349.6686.8608.5528.6527.7572.2594.0603.7616.1

Apartment Investment & Management Co Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
Gross_Profit 149.7156.4148.4150.9150.3154.1147.2155.8155.9157.3
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