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D.R. Horton Inc (NYSE:DHI)
Gross Profit
$2,495 Mil (TTM As of Jun. 2016)

D.R. Horton Inc's gross profit for the three months ended in Jun. 2016 was $709 Mil. D.R. Horton Inc's gross profit for the trailing twelve months (TTM) ended in Jun. 2016 was $2,495 Mil.

Gross Margin is calculated as gross profit divided by its revenue. D.R. Horton Inc's gross profit for the three months ended in Jun. 2016 was $709 Mil. D.R. Horton Inc's revenue for the three months ended in Jun. 2016 was $3,232 Mil. Therefore, D.R. Horton Inc's Gross Margin for the quarter that ended in Jun. 2016 was 21.93%.

D.R. Horton Inc had a gross margin of 21.93% for the quarter that ended in Jun. 2016 => Competition eroding margins

During the past 13 years, the highest Gross Margin of D.R. Horton Inc was 22.46%. The lowest was -24.61%. And the median was 18.68%.


Definition

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

D.R. Horton Inc's Gross Profit for the fiscal year that ended in Sep. 2015 is calculated as

Gross Profit (A: Sep. 2015 )=Revenue - Cost of Goods Sold
=10824 - 8535.7
=2,288

D.R. Horton Inc's Gross Profit for the quarter that ended in Jun. 2016 is calculated as

Gross Profit (Q: Jun. 2016 )=Revenue - Cost of Goods Sold
=3231.9 - 2523
=709

D.R. Horton Inc Gross Profit for the trailing twelve months (TTM) ended in Jun. 2016 was 663.6 (Sep. 2015 ) + 524.2 (Dec. 2015 ) + 598.6 (Mar. 2016 ) + 708.9 (Jun. 2016 ) = $2,495 Mil.

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

D.R. Horton Inc's Gross Margin for the quarter that ended in Jun. 2016 is calculated as

Gross Margin (Q: Jun. 2016 )=Gross Profit (Q: Jun. 2016 ) / Revenue (Q: Jun. 2016 )
=(Revenue - Cost of Goods Sold) / Revenue
=709 / 3231.9
=21.93 %

* 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

D.R. Horton Inc had a gross margin of 21.93% for the quarter that ended in Jun. 2016 => Competition eroding margins


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.

D.R. Horton Inc Annual Data

Sep06Sep07Sep08Sep09Sep10Sep11Sep12Sep13Sep14Sep15
Gross_Profit 3,342811-1,6361197736148621,4061,7562,288

D.R. Horton Inc Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
Gross_Profit 415422523488506630664524599709
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