Switch to:
Goodyear Tire & Rubber Co (NAS:GT)
Gross Profit
\$4,159 Mil (TTM As of Sep. 2016)

Goodyear Tire & Rubber Co's gross profit for the three months ended in Sep. 2016 was \$1,111 Mil. Goodyear Tire & Rubber Co's gross profit for the trailing twelve months (TTM) ended in Sep. 2016 was \$4,159 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Goodyear Tire & Rubber Co's gross profit for the three months ended in Sep. 2016 was \$1,111 Mil. Goodyear Tire & Rubber Co's revenue for the three months ended in Sep. 2016 was \$3,847 Mil. Therefore, Goodyear Tire & Rubber Co's Gross Margin for the quarter that ended in Sep. 2016 was 28.88%.

Goodyear Tire & Rubber Co had a gross margin of 28.88% for the quarter that ended in Sep. 2016 => Competition eroding margins

During the past 13 years, the highest Gross Margin of Goodyear Tire & Rubber Co was 26.87%. The lowest was 16.08%. And the median was 18.10%.

Definition

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

Goodyear Tire & Rubber 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 = 16443 - 12164 = 4,279

Goodyear Tire & Rubber 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 = 3847 - 2736 = 1,111

Goodyear Tire & Rubber Co Gross Profit for the trailing twelve months (TTM) ended in Sep. 2016 was 992 (Dec. 2015 ) + 990 (Mar. 2016 ) + 1066 (Jun. 2016 ) + 1111 (Sep. 2016 ) = \$4,159 Mil.

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

Goodyear Tire & Rubber 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 = 1,111 / 3847 = 28.88 %

* 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

Goodyear Tire & Rubber Co had a gross margin of 28.88% for the quarter that ended in Sep. 2016 => Competition eroding margins

Related Terms

Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Goodyear Tire & Rubber Co Annual Data

 Dec06 Dec07 Dec08 Dec09 Dec10 Dec11 Dec12 Dec13 Dec14 Dec15 Gross_Profit 3,015 3,733 3,349 2,625 3,380 3,946 3,829 4,118 4,232 4,279

Goodyear Tire & Rubber Co Quarterly Data

 Jun14 Sep14 Dec14 Mar15 Jun15 Sep15 Dec15 Mar16 Jun16 Sep16 Gross_Profit 1,124 1,141 1,016 958 1,145 1,184 992 990 1,066 1,111
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to \$400 per referral. ( Learn More)