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Harley-Davidson Inc (NYSE:HOG)
Gross Profit
$2,527 Mil (TTM As of Sep. 2014)

Harley-Davidson Inc's gross profit for the three months ended in Sep. 2014 was $526 Mil. Harley-Davidson Inc's gross profit for the trailing twelve months (TTM) ended in Sep. 2014 was $2,527 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Harley-Davidson Inc's gross profit for the three months ended in Sep. 2014 was $526 Mil. Harley-Davidson Inc's revenue for the three months ended in Sep. 2014 was $1,302 Mil. Therefore, Harley-Davidson Inc's Gross Margin for the quarter that ended in Sep. 2014 was 40.37%.

Harley-Davidson Inc had a gross margin of 40.37% for the quarter that ended in Sep. 2014 => Durable competitive advantage

During the past 13 years, the highest Gross Margin of Harley-Davidson Inc was 39.64%. The lowest was 29.73%. And the median was 37.22%.


Definition

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

Harley-Davidson Inc'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
=5899.872 - 3561.409
=2,338

Harley-Davidson Inc's Gross Profit for the quarter that ended in Sep. 2014 is calculated as

Gross Profit (Q: Sep. 2014 )=Revenue - Cost of Goods Sold
=1301.604 - 776.099
=526

Harley-Davidson Inc Gross Profit for the trailing twelve months (TTM) ended in Sep. 2014 was 443.6 (Dec. 2013 ) + 707.634 (Mar. 2014 ) + 849.812 (Jun. 2014 ) + 525.505 (Sep. 2014 ) = $2,527 Mil.

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

Harley-Davidson Inc'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
=526 / 1301.604
=40.37 %

* 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

Harley-Davidson Inc had a gross margin of 40.37% for the quarter that ended in Sep. 2014 => 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 own currency.

Harley-Davidson Inc Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Gross_Profit 1,9002,0402,2332,1142,3081,5971,8381,9762,1622,338

Harley-Davidson Inc Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
Gross_Profit 676493432636719540444708850526
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