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Generac Holdings Inc (NYSE:GNRC)
Gross Profit
$499 Mil (TTM As of Mar. 2015)

Generac Holdings Inc's gross profit for the three months ended in Mar. 2015 was $103 Mil. Generac Holdings Inc's gross profit for the trailing twelve months (TTM) ended in Mar. 2015 was $499 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Generac Holdings Inc's gross profit for the three months ended in Mar. 2015 was $103 Mil. Generac Holdings Inc's revenue for the three months ended in Mar. 2015 was $312 Mil. Therefore, Generac Holdings Inc's Gross Margin for the quarter that ended in Mar. 2015 was 32.90%.

Generac Holdings Inc had a gross margin of 32.90% for the quarter that ended in Mar. 2015 => Competition eroding margins

During the past 8 years, the highest Gross Margin of Generac Holdings Inc was 40.09%. The lowest was 35.18%. And the median was 37.89%.

Warning Sign:

Generac Holdings Inc gross margin has been in long term decline. The average rate of decline per year is -2.1%.


Definition

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

Generac Holdings 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
=1460.919 - 944.7
=516

Generac Holdings Inc's Gross Profit for the quarter that ended in Mar. 2015 is calculated as

Gross Profit (Q: Mar. 2015 )=Revenue - Cost of Goods Sold
=311.818 - 209.215
=103

Generac Holdings Inc Gross Profit for the trailing twelve months (TTM) ended in Mar. 2015 was 128.012 (Jun. 2014 ) + 130.283 (Sep. 2014 ) + 138.41 (Dec. 2014 ) + 102.603 (Mar. 2015 ) = $499 Mil.

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

Generac Holdings Inc's Gross Margin for the quarter that ended in Mar. 2015 is calculated as

Gross Margin (Q: Mar. 2015 )=Gross Profit (Q: Mar. 2015 ) / Revenue (Q: Mar. 2015 )
=(Revenue - Cost of Goods Sold) / Revenue
=103 / 311.818
=32.90 %

* 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

Generac Holdings Inc had a gross margin of 32.90% for the quarter that ended in Mar. 2015 => 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.

Generac Holdings Inc Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
Gross_Profit 00222202236237295440570516

Generac Holdings Inc Quarterly Data

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
Gross_Profit 126153131139146120128130138103
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