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II-VI Inc (NAS:IIVI)
Gross Profit
$274.9 Mil (TTM As of Sep. 2015)

II-VI Inc's gross profit for the three months ended in Sep. 2015 was $71.2 Mil. II-VI Inc's gross profit for the trailing twelve months (TTM) ended in Sep. 2015 was $274.9 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. 2015 was $71.2 Mil. II-VI Inc's revenue for the three months ended in Sep. 2015 was $189.2 Mil. Therefore, II-VI Inc's Gross Margin for the quarter that ended in Sep. 2015 was 37.62%.

II-VI Inc had a gross margin of 37.62% for the quarter that ended in Sep. 2015 => 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 39.62%.

Warning Sign:

II-VI Inc gross margin has been in long term decline. The average rate of decline per year is -2.6%.


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. 2015 is calculated as

Gross Profit (Q: Sep. 2015 )=Revenue - Cost of Goods Sold
=189.207 - 118.018
=71.2

II-VI Inc Gross Profit for the trailing twelve months (TTM) ended in Sep. 2015 was 63.018 (Dec. 2014 ) + 65.725 (Mar. 2015 ) + 74.996 (Jun. 2015 ) + 71.189 (Sep. 2015 ) = $274.9 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. 2015 is calculated as

Gross Margin (Q: Sep. 2015 )=Gross Profit (Q: Sep. 2015 ) / Revenue (Q: Sep. 2015 )
=(Revenue - Cost of Goods Sold) / Revenue
=71.2 / 189.207
=37.62 %

* 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

II-VI Inc had a gross margin of 37.62% for the quarter that ended in Sep. 2015 => 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 own currency.

II-VI Inc Annual Data

Jun06Jun07Jun08Jun09Jun10Jun11Jun12Jun13Jun14Jun15
Gross_Profit 93.5119.4130.2123.6134.6206.9192.7203.5226.7271.6

II-VI Inc Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
Gross_Profit 56.353.454.762.367.963.065.775.071.271.3
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