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W R Grace & Co (NYSE:GRA)
Gross Profit
$1,165 Mil (TTM As of Jun. 2014)

W R Grace & Co's gross profit for the three months ended in Jun. 2014 was $321 Mil. W R Grace & Co's gross profit for the trailing twelve months (TTM) ended in Jun. 2014 was $1,165 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 Jun. 2014 was $321 Mil. W R Grace & Co's revenue for the three months ended in Jun. 2014 was $838 Mil. Therefore, W R Grace & Co's Gross Margin for the quarter that ended in Jun. 2014 was 38.29%.

W R Grace & Co had a gross margin of 38.29% for the quarter that ended in Jun. 2014 => Competition eroding margins

During the past 13 years, the highest Gross Margin of W R Grace & Co was 40.08%. The lowest was 29.65%. And the median was 36.16%.


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. 2013 is calculated as

Gross Profit (A: Dec. 2013 )=Revenue - Cost of Goods Sold
=3060.7 - 1918.6
=1,142

W R Grace & Co's Gross Profit for the quarter that ended in Jun. 2014 is calculated as

Gross Profit (Q: Jun. 2014 )=Revenue - Cost of Goods Sold
=838 - 517.1
=321

W R Grace & Co Gross Profit for the trailing twelve months (TTM) ended in Jun. 2014 was 284.7 (Sep. 2013 ) + 290.3 (Dec. 2013 ) + 269.2 (Mar. 2014 ) + 320.9 (Jun. 2014 ) = $1,165 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 Jun. 2014 is calculated as

Gross Margin (Q: Jun. 2014 )=Gross Profit (Q: Jun. 2014 ) / Revenue (Q: Jun. 2014 )
=(Revenue - Cost of Goods Sold) / Revenue
=321 / 838
=38.29 %

* 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 38.29% for the quarter that ended in Jun. 2014 => 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.

W R Grace & Co Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Gross_Profit 8288809829879849259491,1611,1141,142

W R Grace & Co Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
Gross_Profit 304285248259301285290269321328
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