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Black Hills Corp (NYSE:BKH)
Gross Profit
$985 Mil (TTM As of Sep. 2016)

Black Hills Corp's gross profit for the three months ended in Sep. 2016 was $254 Mil. Black Hills Corp's gross profit for the trailing twelve months (TTM) ended in Sep. 2016 was $985 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Black Hills Corp's gross profit for the three months ended in Sep. 2016 was $254 Mil. Black Hills Corp's revenue for the three months ended in Sep. 2016 was $334 Mil. Therefore, Black Hills Corp's Gross Margin for the quarter that ended in Sep. 2016 was 75.97%.

Black Hills Corp had a gross margin of 75.97% for the quarter that ended in Sep. 2016 => Durable competitive advantage

During the past 13 years, the highest Gross Margin of Black Hills Corp was 74.72%. The lowest was 48.59%. And the median was 59.84%.


Definition

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

Black Hills Corp's Gross Profit for the fiscal year that ended in Dec. 2015 is calculated as

Gross Profit (A: Dec. 2015 )=Revenue - Cost of Goods Sold
=1304.605 - 456.887
=848

Black Hills Corp's Gross Profit for the quarter that ended in Sep. 2016 is calculated as

Gross Profit (Q: Sep. 2016 )=Revenue - Cost of Goods Sold
=333.786 - 80.194
=254

Black Hills Corp Gross Profit for the trailing twelve months (TTM) ended in Sep. 2016 was 212.15 (Dec. 2015 ) + 278.103 (Mar. 2016 ) + 240.952 (Jun. 2016 ) + 253.592 (Sep. 2016 ) = $985 Mil.

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

Black Hills Corp's Gross Margin for the quarter that ended in Sep. 2016 is calculated as

Gross Margin (Q: Sep. 2016 )=Gross Profit (Q: Sep. 2016 ) / Revenue (Q: Sep. 2016 )
=(Revenue - Cost of Goods Sold) / Revenue
=254 / 333.786
=75.97 %

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's 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

Black Hills Corp had a gross margin of 75.97% for the quarter that ended in Sep. 2016 => 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 local exchange's currency.

Black Hills Corp Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
Gross_Profit 351520556617653697767784812848

Black Hills Corp Quarterly Data

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
Gross_Profit 182187213237198200212278241254
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