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W R Grace & Co (NYSE:GRA)
Gross Profit
$1,192 Mil (TTM As of Dec. 2014)

W R Grace & Co's gross profit for the three months ended in Dec. 2014 was $275 Mil. W R Grace & Co's gross profit for the trailing twelve months (TTM) ended in Dec. 2014 was $1,192 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 Dec. 2014 was $275 Mil. W R Grace & Co's revenue for the three months ended in Dec. 2014 was $804 Mil. Therefore, W R Grace & Co's Gross Margin for the quarter that ended in Dec. 2014 was 34.14%.

W R Grace & Co had a gross margin of 34.14% for the quarter that ended in Dec. 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 36.37%.


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. 2014 is calculated as

Gross Profit (A: Dec. 2014 )=Revenue - Cost of Goods Sold
=3243 - 2050.6
=1,192

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

Gross Profit (Q: Dec. 2014 )=Revenue - Cost of Goods Sold
=804.1 - 529.6
=275

W R Grace & Co Gross Profit for the trailing twelve months (TTM) ended in Dec. 2014 was 269.2 (Mar. 2014 ) + 320.9 (Jun. 2014 ) + 327.8 (Sep. 2014 ) + 274.5 (Dec. 2014 ) = $1,192 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 Dec. 2014 is calculated as

Gross Margin (Q: Dec. 2014 )=Gross Profit (Q: Dec. 2014 ) / Revenue (Q: Dec. 2014 )
=(Revenue - Cost of Goods Sold) / Revenue
=275 / 804.1
=34.14 %

* 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 34.14% for the quarter that ended in Dec. 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

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
Gross_Profit 8809829879849259491,1611,1141,1421,192

W R Grace & Co Quarterly Data

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
Gross_Profit 285248259301282300269321328275
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