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Flex Ltd (NAS:FLEX)
Gross Profit
$1,578 Mil (TTM As of Sep. 2016)

Flex Ltd's gross profit for the three months ended in Sep. 2016 was $314 Mil. Flex Ltd's gross profit for the trailing twelve months (TTM) ended in Sep. 2016 was $1,578 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Flex Ltd's gross profit for the three months ended in Sep. 2016 was $314 Mil. Flex Ltd's revenue for the three months ended in Sep. 2016 was $6,009 Mil. Therefore, Flex Ltd's Gross Margin for the quarter that ended in Sep. 2016 was 5.22%.

Flex Ltd had a gross margin of 5.22% for the quarter that ended in Sep. 2016 => No sustainable competitive advantage

During the past 13 years, the highest Gross Margin of Flex Ltd was 6.59%. The lowest was 4.14%. And the median was 5.11%.


Definition

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

Flex Ltd's Gross Profit for the fiscal year that ended in Mar. 2016 is calculated as

Gross Profit (A: Mar. 2016 )=Revenue - Cost of Goods Sold
=24418.885 - 22810.824
=1,608

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

Gross Profit (Q: Sep. 2016 )=Revenue - Cost of Goods Sold
=6008.525 - 5694.834
=314

Flex Ltd Gross Profit for the trailing twelve months (TTM) ended in Sep. 2016 was 452.467 (Dec. 2015 ) + 406.337 (Mar. 2016 ) + 405.995 (Jun. 2016 ) + 313.691 (Sep. 2016 ) = $1,578 Mil.

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

Flex Ltd'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
=314 / 6008.525
=5.22 %

* 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

Flex Ltd had a gross margin of 5.22% for the quarter that ended in Sep. 2016 => 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 local exchange's currency.

Flex Ltd Annual Data

Mar07Mar08Mar09Mar10Mar11Mar12Mar13Mar14Mar15Mar16
Gross_Profit 9291,1761,2801,2181,5831,5181,1661,4401,5451,608

Flex Ltd Quarterly Data

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
Gross_Profit 381377409379352397452406406314
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