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IAC/InterActiveCorp (NAS:IACI)
Gross Profit
$2,226 Mil (TTM As of Dec. 2014)

IAC/InterActiveCorp's gross profit for the three months ended in Dec. 2014 was $594 Mil. IAC/InterActiveCorp's gross profit for the trailing twelve months (TTM) ended in Dec. 2014 was $2,226 Mil.

Gross Margin is calculated as gross profit divided by its revenue. IAC/InterActiveCorp's gross profit for the three months ended in Dec. 2014 was $594 Mil. IAC/InterActiveCorp's revenue for the three months ended in Dec. 2014 was $831 Mil. Therefore, IAC/InterActiveCorp's Gross Margin for the quarter that ended in Dec. 2014 was 71.51%.

IAC/InterActiveCorp had a gross margin of 71.51% for the quarter that ended in Dec. 2014 => Durable competitive advantage

During the past 13 years, the highest Gross Margin of IAC/InterActiveCorp was 98.75%. The lowest was 5.84%. And the median was 56.49%.


Definition

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

IAC/InterActiveCorp'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
=3109.547 - 883.176
=2,226

IAC/InterActiveCorp's Gross Profit for the quarter that ended in Dec. 2014 is calculated as

Gross Profit (Q: Dec. 2014 )=Revenue - Cost of Goods Sold
=830.754 - 236.69
=594

IAC/InterActiveCorp Gross Profit for the trailing twelve months (TTM) ended in Dec. 2014 was 531.053 (Mar. 2014 ) + 545.215 (Jun. 2014 ) + 556.039 (Sep. 2014 ) + 594.064 (Dec. 2014 ) = $2,226 Mil.

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

IAC/InterActiveCorp'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
=594 / 830.754
=71.51 %

* 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

IAC/InterActiveCorp had a gross margin of 71.51% 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.

IAC/InterActiveCorp Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
Gross_Profit 2,4176327789689171,0431,2981,8102,0192,226

IAC/InterActiveCorp Quarterly Data

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
Gross_Profit 452497486527508498531545556594
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