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Dell Inc (NAS:DELL)
Gross Profit
\$11,417 Mil (TTM As of Jul. 2013)

Dell Inc's gross profit for the three months ended in Jul. 2013 was \$2,689 Mil. Dell Inc's gross profit for the trailing twelve months (TTM) ended in Jul. 2013 was \$11,417 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Dell Inc's gross profit for the three months ended in Jul. 2013 was \$2,689 Mil. Dell Inc's revenue for the three months ended in Jul. 2013 was \$14,514 Mil. Therefore, Dell Inc's Gross Margin for the quarter that ended in Jul. 2013 was 18.53%.

Dell Inc had a gross margin of 18.53% for the quarter that ended in Jul. 2013 => No sustainable competitive advantage

Definition

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

Dell Inc's Gross Profit for the fiscal year that ended in Jan. 2013 is calculated as

 Gross Profit (A: Jan. 2013 ) = Revenue - Cost of Goods Sold = 56940 - 44754 = 12,186

Dell Inc's Gross Profit for the quarter that ended in Jul. 2013 is calculated as

 Gross Profit (Q: Jul. 2013 ) = Revenue - Cost of Goods Sold = 14514 - 11825 = 2,689

Dell Inc Gross Profit for the trailing twelve months (TTM) ended in Jul. 2013 was 2872 (Oct. 2012 ) + 3109 (Jan. 2013 ) + 2747 (Apr. 2013 ) + 2689 (Jul. 2013 ) = \$11,417 Mil.

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

Dell Inc's Gross Margin for the quarter that ended in Jul. 2013 is calculated as

 Gross Margin (Q: Jul. 2013 ) = Gross Profit (Q: Jul. 2013 ) / Revenue (Q: Jul. 2013 ) = (Revenue - Cost of Goods Sold) / Revenue = 2,689 / 14514 = 18.53 %

* 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

Dell Inc had a gross margin of 18.53% for the quarter that ended in Jul. 2013 => No sustainable competitive advantage

Related Terms

Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Dell Inc Annual Data

 Jan04 Jan05 Jan06 Jan07 Jan08 Jan09 Jan10 Jan11 Jan12 Jan13 Gross_Profit 7,552 9,018 9,891 9,516 11,671 10,957 9,261 11,396 13,811 12,186

Dell Inc Quarterly Data

 Apr11 Jul11 Oct11 Jan12 Apr12 Jul12 Oct12 Jan13 Apr13 Jul13 Gross_Profit 3,432 3,525 3,469 3,385 3,067 3,138 2,872 3,109 2,747 2,689
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