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Homeinns Hotel Group (NAS:HMIN)
Gross Profit
$175 Mil (TTM As of Sep. 2014)

Homeinns Hotel Group's gross profit for the three months ended in Sep. 2014 was $65 Mil. Homeinns Hotel Group's gross profit for the trailing twelve months (TTM) ended in Sep. 2014 was $175 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Homeinns Hotel Group's gross profit for the three months ended in Sep. 2014 was $65 Mil. Homeinns Hotel Group's revenue for the three months ended in Sep. 2014 was $287 Mil. Therefore, Homeinns Hotel Group's Gross Margin for the quarter that ended in Sep. 2014 was 22.51%.

Homeinns Hotel Group had a gross margin of 22.51% for the quarter that ended in Sep. 2014 => Competition eroding margins

During the past 13 years, the highest Gross Margin of Homeinns Hotel Group was 51.98%. The lowest was 14.30%. And the median was 21.14%.


Definition

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

Homeinns Hotel Group'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
=981.42081001 - 801.27609483
=180

Homeinns Hotel Group's Gross Profit for the quarter that ended in Sep. 2014 is calculated as

Gross Profit (Q: Sep. 2014 )=Revenue - Cost of Goods Sold
=287.452673422 - 222.745918999
=65

Homeinns Hotel Group Gross Profit for the trailing twelve months (TTM) ended in Sep. 2014 was 38.4142245637 (Dec. 2013 ) + 20.7255791349 (Mar. 2014 ) + 51.3568516676 (Jun. 2014 ) + 64.7067544231 (Sep. 2014 ) = $175 Mil.

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

Homeinns Hotel Group's Gross Margin for the quarter that ended in Sep. 2014 is calculated as

Gross Margin (Q: Sep. 2014 )=Gross Profit (Q: Sep. 2014 ) / Revenue (Q: Sep. 2014 )
=(Revenue - Cost of Goods Sold) / Revenue
=65 / 287.452673422
=22.51 %

* 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

Homeinns Hotel Group had a gross margin of 22.51% for the quarter that ended in Sep. 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.

Homeinns Hotel Group Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
Gross_Profit 1619313866114107124180169

Homeinns Hotel Group Quarterly Data

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
Gross_Profit 38231544553821516533
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