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Clorox Company (NYSE:CLX)
Gross Profit
$2,417 Mil (TTM As of Dec. 2013)

Clorox Company's gross profit for the three months ended in Dec. 2013 was $557 Mil. Clorox Company's gross profit for the trailing twelve months (TTM) ended in Dec. 2013 was $2,417 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Clorox Company's gross profit for the three months ended in Dec. 2013 was $557 Mil. Clorox Company's revenue for the three months ended in Dec. 2013 was $1,330 Mil. Therefore, Clorox Company's Gross Margin for the quarter that ended in Dec. 2013 was 41.88%.

Clorox Company had a gross margin of 41.88% for the quarter that ended in Dec. 2013 => Durable competitive advantage

During the past 13 years, the highest Gross Margin of Clorox Company was 60.27%. The lowest was 40.58%. And the median was 43.45%.


Definition

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

Clorox Company's Gross Profit for the fiscal year that ended in Jun. 2013 is calculated as

Gross Profit (A: Jun. 2013 )=Revenue - Cost of Goods Sold
=5623 - 3211
=2,412

Clorox Company's Gross Profit for the quarter that ended in Dec. 2013 is calculated as

Gross Profit (Q: Dec. 2013 )=Revenue - Cost of Goods Sold
=1330 - 773
=557

Clorox Company Gross Profit for the trailing twelve months (TTM) ended in Dec. 2013 was 595 (Mar. 2013 ) + 680 (Jun. 2013 ) + 585 (Sep. 2013 ) + 557 (Dec. 2013 ) = $2,417 Mil.

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

Clorox Company's Gross Margin for the quarter that ended in Dec. 2013 is calculated as

Gross Margin (Q: Dec. 2013 )=Gross Profit (Q: Dec. 2013 ) / Revenue (Q: Dec. 2013 )
=(Revenue - Cost of Goods Sold) / Revenue
=557 / 1330
=41.88 %

* 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

Clorox Company had a gross margin of 41.88% for the quarter that ended in Dec. 2013 => 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.

Clorox Company Annual Data

Jun04Jun05Jun06Jun07Jun08Jun09Jun10Jun11Jun12Jun13
Gross_Profit 1,8311,8951,9592,0912,1752,3462,3192,2732,3042,412

Clorox Company Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
Gross_Profit 546507593658574563595680585557
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