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IAC/InterActiveCorp (NAS:IACI)
Gross Profit
$2,024 Mil (TTM As of Dec. 2013)

IAC/InterActiveCorp's gross profit for the three months ended in Dec. 2013 was $502 Mil. IAC/InterActiveCorp's gross profit for the trailing twelve months (TTM) ended in Dec. 2013 was $2,024 Mil.

Gross Margin is calculated as gross profit divided by its revenue. IAC/InterActiveCorp's gross profit for the three months ended in Dec. 2013 was $502 Mil. IAC/InterActiveCorp's revenue for the three months ended in Dec. 2013 was $724 Mil. Therefore, IAC/InterActiveCorp's Gross Margin for the quarter that ended in Dec. 2013 was 69.28%.

IAC/InterActiveCorp had a gross margin of 69.28% for the quarter that ended in Dec. 2013 => 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 59.64%.


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. 2013 is calculated as

Gross Profit (A: Dec. 2013 )=Revenue - Cost of Goods Sold
=3022.987 - 1000.101
=2,023

IAC/InterActiveCorp's Gross Profit for the quarter that ended in Dec. 2013 is calculated as

Gross Profit (Q: Dec. 2013 )=Revenue - Cost of Goods Sold
=724.455 - 222.574
=502

IAC/InterActiveCorp Gross Profit for the trailing twelve months (TTM) ended in Dec. 2013 was 487.167 (Mar. 2013 ) + 526.589 (Jun. 2013 ) + 508.016 (Sep. 2013 ) + 501.881 (Dec. 2013 ) = $2,024 Mil.

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

IAC/InterActiveCorp's Gross Margin for the quarter that ended in Dec. 2013 is calculated as

Gross Margin (Q: Dec. 2013 )=Gross Profit (Q: Dec. 2013 ) / Revenue (Q: Dec. 2013 )
=(Revenue - Cost of Goods Sold) / Revenue
=502 / 724.455
=69.28 %

* 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 69.28% for the quarter that ended in Dec. 2013 => 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

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Gross_Profit 1,7372,4176327789689171,0431,2981,8102,023

IAC/InterActiveCorp Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
Gross_Profit 328379417443452497487527508502
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