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W R Grace & Co (NYSE:GRA)
Gross Profit
$1,062 Mil (TTM As of Mar. 2016)

W R Grace & Co's gross profit for the three months ended in Mar. 2016 was $153 Mil. W R Grace & Co's gross profit for the trailing twelve months (TTM) ended in Mar. 2016 was $1,062 Mil.

Gross Margin is calculated as gross profit divided by its revenue. W R Grace & Co's gross profit for the three months ended in Mar. 2016 was $153 Mil. W R Grace & Co's revenue for the three months ended in Mar. 2016 was $363 Mil. Therefore, W R Grace & Co's Gross Margin for the quarter that ended in Mar. 2016 was 42.09%.

W R Grace & Co had a gross margin of 42.09% for the quarter that ended in Mar. 2016 => Durable competitive advantage

During the past 13 years, the highest Gross Margin of W R Grace & Co was 38.26%. The lowest was 29.49%. And the median was 35.71%.


Definition

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

W R Grace & Co'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
=3051.5 - 1884
=1,168

W R Grace & Co's Gross Profit for the quarter that ended in Mar. 2016 is calculated as

Gross Profit (Q: Mar. 2016 )=Revenue - Cost of Goods Sold
=362.8 - 210.1
=153

W R Grace & Co Gross Profit for the trailing twelve months (TTM) ended in Mar. 2016 was 310.6 (Jun. 2015 ) + 311.9 (Sep. 2015 ) + 286.7 (Dec. 2015 ) + 152.7 (Mar. 2016 ) = $1,062 Mil.

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

W R Grace & Co's Gross Margin for the quarter that ended in Mar. 2016 is calculated as

Gross Margin (Q: Mar. 2016 )=Gross Profit (Q: Mar. 2016 ) / Revenue (Q: Mar. 2016 )
=(Revenue - Cost of Goods Sold) / Revenue
=153 / 362.8
=42.09 %

* 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

W R Grace & Co had a gross margin of 42.09% for the quarter that ended in Mar. 2016 => Durable 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.

W R Grace & Co Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
Gross_Profit 9829689789249451,1591,1661,1421,1921,168

W R Grace & Co Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
Gross_Profit 300269321328275147311312287153
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