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Air Products & Chemicals Inc (NYSE:APD)
Gross Profit
$2,804 Mil (TTM As of Sep. 2014)

Air Products & Chemicals Inc's gross profit for the three months ended in Sep. 2014 was $745 Mil. Air Products & Chemicals Inc's gross profit for the trailing twelve months (TTM) ended in Sep. 2014 was $2,804 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Air Products & Chemicals Inc's gross profit for the three months ended in Sep. 2014 was $745 Mil. Air Products & Chemicals Inc's revenue for the three months ended in Sep. 2014 was $2,677 Mil. Therefore, Air Products & Chemicals Inc's Gross Margin for the quarter that ended in Sep. 2014 was 27.81%.

Air Products & Chemicals Inc had a gross margin of 27.81% for the quarter that ended in Sep. 2014 => Competition eroding margins

During the past 13 years, the highest Gross Margin of Air Products & Chemicals Inc was 41.93%. The lowest was 25.90%. And the median was 27.15%.


Definition

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

Air Products & Chemicals Inc'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
=10439 - 7634.6
=2,804

Air Products & Chemicals Inc's Gross Profit for the quarter that ended in Sep. 2014 is calculated as

Gross Profit (Q: Sep. 2014 )=Revenue - Cost of Goods Sold
=2677 - 1932.4
=745

Air Products & Chemicals Inc Gross Profit for the trailing twelve months (TTM) ended in Sep. 2014 was 679.6 (Dec. 2013 ) + 664.3 (Mar. 2014 ) + 715.9 (Jun. 2014 ) + 744.6 (Sep. 2014 ) = $2,804 Mil.

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

Air Products & Chemicals Inc'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
=745 / 2677
=27.81 %

* 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

Air Products & Chemicals Inc had a gross margin of 27.81% for the quarter that ended in Sep. 2014 => Competition eroding margins


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.

Air Products & Chemicals Inc Annual Data

Sep05Sep06Sep07Sep08Sep09Sep10Sep11Sep12Sep13Sep14
Gross_Profit 2,1322,2922,6762,7212,2142,5232,7672,5602,7082,804

Air Products & Chemicals Inc Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
Gross_Profit 649683662671672704680664716745
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