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Brady Corp (NYSE:BRC)
Gross Profit
$609 Mil (TTM As of Apr. 2014)

Brady Corp's gross profit for the three months ended in Apr. 2014 was $155 Mil. Brady Corp's gross profit for the trailing twelve months (TTM) ended in Apr. 2014 was $609 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Brady Corp's gross profit for the three months ended in Apr. 2014 was $155 Mil. Brady Corp's revenue for the three months ended in Apr. 2014 was $310 Mil. Therefore, Brady Corp's Gross Margin for the quarter that ended in Apr. 2014 was 50.11%.

Brady Corp had a gross margin of 50.11% for the quarter that ended in Apr. 2014 => Durable competitive advantage

During the past 13 years, the highest Gross Margin of Brady Corp was 57.91%. The lowest was 47.79%. And the median was 52.87%.


Definition

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

Brady Corp's Gross Profit for the fiscal year that ended in Jul. 2013 is calculated as

Gross Profit (A: Jul. 2013 )=Revenue - Cost of Goods Sold
=1152.109 - 546.029
=606

Brady Corp's Gross Profit for the quarter that ended in Apr. 2014 is calculated as

Gross Profit (Q: Apr. 2014 )=Revenue - Cost of Goods Sold
=309.577 - 154.457
=155

Brady Corp Gross Profit for the trailing twelve months (TTM) ended in Apr. 2014 was 154.603 (Jul. 2013 ) + 156.945 (Oct. 2013 ) + 142.536 (Jan. 2014 ) + 155.12 (Apr. 2014 ) = $609 Mil.

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

Brady Corp's Gross Margin for the quarter that ended in Apr. 2014 is calculated as

Gross Margin (Q: Apr. 2014 )=Gross Profit (Q: Apr. 2014 ) / Revenue (Q: Apr. 2014 )
=(Revenue - Cost of Goods Sold) / Revenue
=155 / 309.577
=50.11 %

* 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

Brady Corp had a gross margin of 50.11% for the quarter that ended in Apr. 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.

Brady Corp Annual Data

Jul05Jul06Jul07Jul08Jul09Jul10Jul11Jul12Jul13Jul14
Gross_Profit 433526657744578623588590606610

Brady Corp Quarterly Data

Apr12Jul12Oct12Jan13Apr13Jul13Oct13Jan14Apr14Jul14
Gross_Profit 152143150142159155157143155154
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