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Kratos Defense & Security Solutions Inc (NAS:KTOS)
Gross Profit
$170.4 Mil (TTM As of Dec. 2015)

Kratos Defense & Security Solutions Inc's gross profit for the three months ended in Dec. 2015 was $42.2 Mil. Kratos Defense & Security Solutions Inc's gross profit for the trailing twelve months (TTM) ended in Dec. 2015 was $170.4 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Kratos Defense & Security Solutions Inc's gross profit for the three months ended in Dec. 2015 was $42.2 Mil. Kratos Defense & Security Solutions Inc's revenue for the three months ended in Dec. 2015 was $177.5 Mil. Therefore, Kratos Defense & Security Solutions Inc's Gross Margin for the quarter that ended in Dec. 2015 was 23.77%.

Kratos Defense & Security Solutions Inc had a gross margin of 23.77% for the quarter that ended in Dec. 2015 => Competition eroding margins

During the past 13 years, the highest Gross Margin of Kratos Defense & Security Solutions Inc was 26.78%. The lowest was 16.32%. And the median was 22.08%.


Definition

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

Kratos Defense & Security Solutions Inc's Gross Profit for the fiscal year that ended in Dec. 2015 is calculated as

Gross Profit (A: Dec. 2015 )=Revenue - Cost of Goods Sold
=657.1 - 495.3
=161.8

Kratos Defense & Security Solutions Inc's Gross Profit for the quarter that ended in Dec. 2015 is calculated as

Gross Profit (Q: Dec. 2015 )=Revenue - Cost of Goods Sold
=177.5 - 135.3
=42.2

Kratos Defense & Security Solutions Inc Gross Profit for the trailing twelve months (TTM) ended in Dec. 2015 was 46.9 (Mar. 2015 ) + 40.9 (Jun. 2015 ) + 40.4 (Sep. 2015 ) + 42.2 (Dec. 2015 ) = $170.4 Mil.

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

Kratos Defense & Security Solutions Inc's Gross Margin for the quarter that ended in Dec. 2015 is calculated as

Gross Margin (Q: Dec. 2015 )=Gross Profit (Q: Dec. 2015 ) / Revenue (Q: Dec. 2015 )
=(Revenue - Cost of Goods Sold) / Revenue
=42.2 / 177.5
=23.77 %

* 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

Kratos Defense & Security Solutions Inc had a gross margin of 23.77% for the quarter that ended in Dec. 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.

Kratos Defense & Security Solutions Inc Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
Gross_Profit 28.931.658.263.684.3191.2257.2204.5179.4161.8

Kratos Defense & Security Solutions Inc Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
Gross_Profit 52.326.052.648.142.445.146.940.940.442.2
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