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Apartment Investment & Management Company (NYSE:AIV)
Gross Profit
$602.5 Mil (TTM As of Dec. 2013)

Apartment Investment & Management Company's gross profit for the three months ended in Dec. 2013 was $138.5 Mil. Apartment Investment & Management Company's gross profit for the trailing twelve months (TTM) ended in Dec. 2013 was $602.5 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Apartment Investment & Management Company's gross profit for the three months ended in Dec. 2013 was $138.5 Mil. Apartment Investment & Management Company's revenue for the three months ended in Dec. 2013 was $219.5 Mil. Therefore, Apartment Investment & Management Company's Gross Margin for the quarter that ended in Dec. 2013 was 63.09%.

Apartment Investment & Management Company had a gross margin of 63.09% for the quarter that ended in Dec. 2013 => Durable competitive advantage

During the past 13 years, the highest Gross Margin of Apartment Investment & Management Company was 98.03%. The lowest was 53.80%. And the median was 57.60%.


Definition

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

Apartment Investment & Management Company's Gross Profit for the fiscal year that ended in Dec. 2013 is calculated as

Gross Profit (A: Dec. 2013 )=Revenue - Cost of Goods Sold
=974.053 - 380.013
=594.0

Apartment Investment & Management Company's Gross Profit for the quarter that ended in Dec. 2013 is calculated as

Gross Profit (Q: Dec. 2013 )=Revenue - Cost of Goods Sold
=219.483 - 81.018
=138.5

Apartment Investment & Management Company Gross Profit for the trailing twelve months (TTM) ended in Dec. 2013 was 152.141 (Mar. 2013 ) + 156.248 (Jun. 2013 ) + 155.678 (Sep. 2013 ) + 138.465 (Dec. 2013 ) = $602.5 Mil.

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

Apartment Investment & Management Company's Gross Margin for the quarter that ended in Dec. 2013 is calculated as

Gross Margin (Q: Dec. 2013 )=Gross Profit (Q: Dec. 2013 ) / Revenue (Q: Dec. 2013 )
=(Revenue - Cost of Goods Sold) / Revenue
=138.5 / 219.483
=63.09 %

* 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 Company had a gross margin of 63.09% for the quarter that ended in Dec. 2013 => 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 Company Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Gross_Profit 0.00.00.01,349.6686.8608.5528.6565.6572.2594.0

Apartment Investment & Management Company Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
Gross_Profit 145.7136.1150.1150.2149.0130.7152.1156.2155.7138.5
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