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American Realty Investors Inc (NYSE:ARL)
Gross Profit
$42.97 Mil (TTM As of Jun. 2015)

American Realty Investors Inc's gross profit for the three months ended in Jun. 2015 was $12.94 Mil. American Realty Investors Inc's gross profit for the trailing twelve months (TTM) ended in Jun. 2015 was $42.97 Mil.

Gross Margin is calculated as gross profit divided by its revenue. American Realty Investors Inc's gross profit for the three months ended in Jun. 2015 was $12.94 Mil. American Realty Investors Inc's revenue for the three months ended in Jun. 2015 was $24.24 Mil. Therefore, American Realty Investors Inc's Gross Margin for the quarter that ended in Jun. 2015 was 53.38%.

American Realty Investors Inc had a gross margin of 53.38% for the quarter that ended in Jun. 2015 => Durable competitive advantage

During the past 13 years, the highest Gross Margin of American Realty Investors Inc was 69.35%. The lowest was 33.15%. And the median was 46.33%.


Definition

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

American Realty Investors Inc's Gross Profit for the fiscal year that ended in Mar. 2014 is calculated as

Gross Profit (A: Mar. 2014 )=Revenue - Cost of Goods Sold
=89.869 - 43.932
=45.94

American Realty Investors Inc's Gross Profit for the quarter that ended in Jun. 2015 is calculated as

Gross Profit (Q: Jun. 2015 )=Revenue - Cost of Goods Sold
=24.241 - 11.301
=12.94

American Realty Investors Inc Gross Profit for the trailing twelve months (TTM) ended in Jun. 2015 was 8.56 (Sep. 2014 ) + 9.979 (Dec. 2014 ) + 11.488 (Mar. 2015 ) + 12.94 (Jun. 2015 ) = $42.97 Mil.

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

American Realty Investors Inc's Gross Margin for the quarter that ended in Jun. 2015 is calculated as

Gross Margin (Q: Jun. 2015 )=Gross Profit (Q: Jun. 2015 ) / Revenue (Q: Jun. 2015 )
=(Revenue - Cost of Goods Sold) / Revenue
=12.94 / 24.241
=53.38 %

* 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

American Realty Investors Inc had a gross margin of 53.38% for the quarter that ended in Jun. 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.

American Realty Investors Inc Annual Data

Mar05Mar06Mar07Mar08Mar09Mar10Mar11Mar12Mar13Mar14
Gross_Profit 324.59183.410.000.0067.4178.0960.5153.2759.9645.94

American Realty Investors Inc Quarterly Data

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
Gross_Profit 10.3710.999.1412.739.239.528.569.9811.4912.94
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