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II-VI Inc (NAS:IIVI)
Gross Profit
$329.2 Mil (TTM As of Sep. 2016)

II-VI Inc's gross profit for the three months ended in Sep. 2016 was $87.6 Mil. II-VI Inc's gross profit for the trailing twelve months (TTM) ended in Sep. 2016 was $329.2 Mil.

Gross Margin is calculated as gross profit divided by its revenue. II-VI Inc's gross profit for the three months ended in Sep. 2016 was $87.6 Mil. II-VI Inc's revenue for the three months ended in Sep. 2016 was $221.5 Mil. Therefore, II-VI Inc's Gross Margin for the quarter that ended in Sep. 2016 was 39.55%.

II-VI Inc had a gross margin of 39.55% for the quarter that ended in Sep. 2016 => Competition eroding margins

During the past 13 years, the highest Gross Margin of II-VI Inc was 45.38%. The lowest was 33.18%. And the median was 38.78%.

Warning Sign:

II-VI Inc gross margin has been in long term decline. The average rate of decline per year is -1.3%.


Definition

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

II-VI Inc's Gross Profit for the fiscal year that ended in Jun. 2015 is calculated as

Gross Profit (A: Jun. 2015 )=Revenue - Cost of Goods Sold
=741.961 - 470.363
=271.6

II-VI Inc's Gross Profit for the quarter that ended in Sep. 2016 is calculated as

Gross Profit (Q: Sep. 2016 )=Revenue - Cost of Goods Sold
=221.52 - 133.918
=87.6

II-VI Inc Gross Profit for the trailing twelve months (TTM) ended in Sep. 2016 was 71.344 (Dec. 2015 ) + 77.669 (Mar. 2016 ) + 92.611 (Jun. 2016 ) + 87.602 (Sep. 2016 ) = $329.2 Mil.

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

II-VI Inc's Gross Margin for the quarter that ended in Sep. 2016 is calculated as

Gross Margin (Q: Sep. 2016 )=Gross Profit (Q: Sep. 2016 ) / Revenue (Q: Sep. 2016 )
=(Revenue - Cost of Goods Sold) / Revenue
=87.6 / 221.52
=39.55 %

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's 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

II-VI Inc had a gross margin of 39.55% for the quarter that ended in Sep. 2016 => 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 local exchange's currency.

II-VI Inc Annual Data

Jun07Jun08Jun09Jun10Jun11Jun12Jun13Jun14Jun15Jun16
Gross_Profit 119.4130.2116.1141.6206.9192.7197.6226.7271.6312.8

II-VI Inc Quarterly Data

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
Gross_Profit 62.367.963.065.775.071.271.377.792.687.6
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