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Jack Henry & Associates, Inc (NAS:JKHY)
Gross Profit
$510 Mil (TTM As of Mar. 2014)

Jack Henry & Associates, Inc's gross profit for the three months ended in Mar. 2014 was $125 Mil. Jack Henry & Associates, Inc's gross profit for the trailing twelve months (TTM) ended in Mar. 2014 was $510 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Jack Henry & Associates, Inc's gross profit for the three months ended in Mar. 2014 was $125 Mil. Jack Henry & Associates, Inc's revenue for the three months ended in Mar. 2014 was $301 Mil. Therefore, Jack Henry & Associates, Inc's Gross Margin for the quarter that ended in Mar. 2014 was 41.38%.

Jack Henry & Associates, Inc had a gross margin of 41.38% for the quarter that ended in Mar. 2014 => Durable competitive advantage

During the past 13 years, the highest Gross Margin of Jack Henry & Associates, Inc was 55.62%. The lowest was 37.90%. And the median was 42.23%.


Definition

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

Jack Henry & Associates, Inc's Gross Profit for the fiscal year that ended in Jun. 2013 is calculated as

Gross Profit (A: Jun. 2013 )=Revenue - Cost of Goods Sold
=1129.386 - 652.394
=477

Jack Henry & Associates, Inc's Gross Profit for the quarter that ended in Mar. 2014 is calculated as

Gross Profit (Q: Mar. 2014 )=Revenue - Cost of Goods Sold
=300.929 - 176.398
=125

Jack Henry & Associates, Inc Gross Profit for the trailing twelve months (TTM) ended in Mar. 2014 was 124.237 (Jun. 2013 ) + 128.725 (Sep. 2013 ) + 132.818 (Dec. 2013 ) + 124.531 (Mar. 2014 ) = $510 Mil.

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

Jack Henry & Associates, Inc's Gross Margin for the quarter that ended in Mar. 2014 is calculated as

Gross Margin (Q: Mar. 2014 )=Gross Profit (Q: Mar. 2014 ) / Revenue (Q: Mar. 2014 )
=(Revenue - Cost of Goods Sold) / Revenue
=125 / 300.929
=41.38 %

* 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

Jack Henry & Associates, Inc had a gross margin of 41.38% for the quarter that ended in Mar. 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.

Jack Henry & Associates, Inc Annual Data

Jun04Jun05Jun06Jun07Jun08Jun09Jun10Jun11Jun12Jun13
Gross_Profit 188222256286307299345399424477

Jack Henry & Associates, Inc Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
Gross_Profit 103109116122115124129133125133
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