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Apartment Investment & Management Company (NYSE:AIV)
Gross Profit
$606.2 Mil (TTM As of Sep. 2014)

Apartment Investment & Management Company's gross profit for the three months ended in Sep. 2014 was $150.4 Mil. Apartment Investment & Management Company's gross profit for the trailing twelve months (TTM) ended in Sep. 2014 was $606.2 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 Sep. 2014 was $150.4 Mil. Apartment Investment & Management Company's revenue for the three months ended in Sep. 2014 was $246.8 Mil. Therefore, Apartment Investment & Management Company's Gross Margin for the quarter that ended in Sep. 2014 was 60.93%.

Apartment Investment & Management Company had a gross margin of 60.93% for the quarter that ended in Sep. 2014 => Durable competitive advantage

During the past 13 years, the highest Gross Margin of Apartment Investment & Management Company was 98.16%. The lowest was 54.18%. And the median was 58.63%.

Warning Sign:

Apartment Investment & Management Company gross margin has been in long term decline. The average rate of decline per year is -5.7%.


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 Sep. 2014 is calculated as

Gross Profit (Q: Sep. 2014 )=Revenue - Cost of Goods Sold
=246.843 - 96.453
=150.4

Apartment Investment & Management Company Gross Profit for the trailing twelve months (TTM) ended in Sep. 2014 was 156.415 (Dec. 2013 ) + 148.402 (Mar. 2014 ) + 150.959 (Jun. 2014 ) + 150.39 (Sep. 2014 ) = $606.2 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 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
=150.4 / 246.843
=60.93 %

* 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 60.93% for the quarter that ended in Sep. 2014 => 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 0.00.00.00.01,431.1656.0620.3619.2619.0594.0

Apartment Investment & Management Company Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
Gross_Profit 161.8158.2150.1142.2145.8149.7156.4148.4151.0150.4
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