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W R Grace & Co (NYSE:GRA)
Gross Profit
$1,181 Mil (TTM As of Sep. 2016)

W R Grace & Co's gross profit for the three months ended in Sep. 2016 was $168 Mil. W R Grace & Co's gross profit for the trailing twelve months (TTM) ended in Sep. 2016 was $1,181 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 Sep. 2016 was $168 Mil. W R Grace & Co's revenue for the three months ended in Sep. 2016 was $405 Mil. Therefore, W R Grace & Co's Gross Margin for the quarter that ended in Sep. 2016 was 41.58%.

W R Grace & Co had a gross margin of 41.58% for the quarter that ended in Sep. 2016 => Durable competitive advantage

During the past 13 years, the highest Gross Margin of W R Grace & Co was 39.28%. The lowest was 29.65%. And the median was 35.02%.


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 Sep. 2016 is calculated as

Gross Profit (Q: Sep. 2016 )=Revenue - Cost of Goods Sold
=404.5 - 236.3
=168

W R Grace & Co Gross Profit for the trailing twelve months (TTM) ended in Sep. 2016 was 686.6 (Dec. 2015 ) + 152.7 (Mar. 2016 ) + 173.2 (Jun. 2016 ) + 168.2 (Sep. 2016 ) = $1,181 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 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
=168 / 404.5
=41.58 %

* 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

W R Grace & Co had a gross margin of 41.58% for the quarter that ended in Sep. 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 local exchange's currency.

W R Grace & Co Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
Gross_Profit 9829879849259491,1131,1141,1421,1921,168

W R Grace & Co Quarterly Data

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
Gross_Profit 321328275147168166687153173168
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