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DaVita Inc (NYSE:DVA)
Gross Profit
$4,097 Mil (TTM As of Sep. 2016)

DaVita Inc's gross profit for the three months ended in Sep. 2016 was $1,033 Mil. DaVita Inc's gross profit for the trailing twelve months (TTM) ended in Sep. 2016 was $4,097 Mil.

Gross Margin is calculated as gross profit divided by its revenue. DaVita Inc's gross profit for the three months ended in Sep. 2016 was $1,033 Mil. DaVita Inc's revenue for the three months ended in Sep. 2016 was $3,731 Mil. Therefore, DaVita Inc's Gross Margin for the quarter that ended in Sep. 2016 was 27.69%.

DaVita Inc had a gross margin of 27.69% for the quarter that ended in Sep. 2016 => Competition eroding margins

During the past 13 years, the highest Gross Margin of DaVita Inc was 32.96%. The lowest was 28.13%. And the median was 30.57%.

Warning Sign:

DaVita Inc gross margin has been in long term decline. The average rate of decline per year is -2.2%.


Definition

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

DaVita Inc's Gross Profit for the fiscal year that ended in Dec. 2015 is calculated as

Gross Profit (A: Dec. 2015 )=Revenue - Cost of Goods Sold
=13781.837 - 9824.834
=3,957

DaVita Inc's Gross Profit for the quarter that ended in Sep. 2016 is calculated as

Gross Profit (Q: Sep. 2016 )=Revenue - Cost of Goods Sold
=3730.576 - 2697.629
=1,033

DaVita Inc Gross Profit for the trailing twelve months (TTM) ended in Sep. 2016 was 1018.458 (Dec. 2015 ) + 998.803 (Mar. 2016 ) + 1046.626 (Jun. 2016 ) + 1032.947 (Sep. 2016 ) = $4,097 Mil.

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

DaVita Inc's Gross Margin for the quarter that ended in Sep. 2016 is calculated as

Gross Margin (Q: Sep. 2016 )=Gross Profit (Q: Sep. 2016 ) / Revenue (Q: Sep. 2016 )
=(Revenue - Cost of Goods Sold) / Revenue
=1,033 / 3730.576
=27.69 %

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's 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

DaVita Inc had a gross margin of 27.69% for the quarter that ended in Sep. 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 local exchange's currency.

DaVita Inc Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
Gross_Profit 1,4901,6741,7401,8601,9732,3012,6073,5663,6763,957

DaVita Inc Quarterly Data

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
Gross_Profit 9269259629259891,0251,0189991,0471,033
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