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DST Systems Inc (NYSE:DST)
Gross Profit
$434 Mil (TTM As of Sep. 2015)

DST Systems Inc's gross profit for the three months ended in Sep. 2015 was $107 Mil. DST Systems Inc's gross profit for the trailing twelve months (TTM) ended in Sep. 2015 was $434 Mil.

Gross Margin is calculated as gross profit divided by its revenue. DST Systems Inc's gross profit for the three months ended in Sep. 2015 was $107 Mil. DST Systems Inc's revenue for the three months ended in Sep. 2015 was $705 Mil. Therefore, DST Systems Inc's Gross Margin for the quarter that ended in Sep. 2015 was 15.15%.

DST Systems Inc had a gross margin of 15.15% for the quarter that ended in Sep. 2015 => No sustainable competitive advantage

During the past 13 years, the highest Gross Margin of DST Systems Inc was 20.64%. The lowest was 14.50%. And the median was 18.86%.

Warning Sign:

DST Systems Inc gross margin has been in long term decline. The average rate of decline per year is -3.7%.


Definition

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

DST Systems Inc's Gross Profit for the fiscal year that ended in Dec. 2014 is calculated as

Gross Profit (A: Dec. 2014 )=Revenue - Cost of Goods Sold
=2749.3 - 2309.4
=440

DST Systems Inc's Gross Profit for the quarter that ended in Sep. 2015 is calculated as

Gross Profit (Q: Sep. 2015 )=Revenue - Cost of Goods Sold
=705 - 598.2
=107

DST Systems Inc Gross Profit for the trailing twelve months (TTM) ended in Sep. 2015 was 120.2 (Dec. 2014 ) + 108.5 (Mar. 2015 ) + 98.9 (Jun. 2015 ) + 106.8 (Sep. 2015 ) = $434 Mil.

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

DST Systems Inc's Gross Margin for the quarter that ended in Sep. 2015 is calculated as

Gross Margin (Q: Sep. 2015 )=Gross Profit (Q: Sep. 2015 ) / Revenue (Q: Sep. 2015 )
=(Revenue - Cost of Goods Sold) / Revenue
=107 / 705
=15.15 %

* 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

DST Systems Inc had a gross margin of 15.15% for the quarter that ended in Sep. 2015 => No sustainable 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.

DST Systems Inc Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
Gross_Profit 435475472405480392374457440428

DST Systems Inc Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
Gross_Profit 12012310010311612010999107113
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