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Harley-Davidson Inc (NYSE:HOG)
Gross Profit
$3,020 Mil (TTM As of Dec. 2014)

Harley-Davidson Inc's gross profit for the three months ended in Dec. 2014 was $1,094 Mil. Harley-Davidson Inc's gross profit for the trailing twelve months (TTM) ended in Dec. 2014 was $3,020 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Harley-Davidson Inc's gross profit for the three months ended in Dec. 2014 was $1,094 Mil. Harley-Davidson Inc's revenue for the three months ended in Dec. 2014 was $1,200 Mil. Therefore, Harley-Davidson Inc's Gross Margin for the quarter that ended in Dec. 2014 was 91.12%.

Harley-Davidson Inc had a gross margin of 91.12% for the quarter that ended in Dec. 2014 => Durable competitive advantage

During the past 13 years, the highest Gross Margin of Harley-Davidson Inc was 93.85%. The lowest was 32.74%. And the median was 37.47%.


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. 2014 is calculated as

Gross Profit (A: Dec. 2014 )=Revenue - Cost of Goods Sold
=6228.508 - 382.991
=5,846

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

Gross Profit (Q: Dec. 2014 )=Revenue - Cost of Goods Sold
=1200.157 - 106.559
=1,094

Harley-Davidson Inc Gross Profit for the trailing twelve months (TTM) ended in Dec. 2014 was 655.321 (Mar. 2014 ) + 798.578 (Jun. 2014 ) + 472.359 (Sep. 2014 ) + 1093.598 (Dec. 2014 ) = $3,020 Mil.

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

Harley-Davidson Inc'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
=1,094 / 1200.157
=91.12 %

* 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 91.12% for the quarter that ended in Dec. 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

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
Gross_Profit 2,0402,2332,1142,3081,5971,8381,9762,1622,3385,846

Harley-Davidson Inc Quarterly Data

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
Gross_Profit 4934326367195404446557994721,094
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