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Kratos Defense & Security Solutions Inc (NAS:KTOS)
Gross Profit
$161.8 Mil (TTM As of Sep. 2016)

Kratos Defense & Security Solutions Inc's gross profit for the six months ended in Sep. 2016 was $25.9 Mil. Kratos Defense & Security Solutions Inc's gross profit for the trailing twelve months (TTM) ended in Sep. 2016 was $161.8 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Kratos Defense & Security Solutions Inc's gross profit for the six months ended in Sep. 2016 was $25.9 Mil. Kratos Defense & Security Solutions Inc's revenue for the six months ended in Sep. 2016 was $165.4 Mil. Therefore, Kratos Defense & Security Solutions Inc's Gross Margin for the quarter that ended in Sep. 2016 was 15.66%.

Kratos Defense & Security Solutions Inc had a gross margin of 15.66% for the quarter that ended in Sep. 2016 => No sustainable competitive advantage

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 Sep. 2016 is calculated as

Gross Profit (Q: Sep. 2016 )=Revenue - Cost of Goods Sold
=165.4 - 139.5
=25.9

For company reported semi-annually, GuruFocus uses latest annual data as the TTM data. Kratos Defense & Security Solutions Inc Gross Profit for the trailing twelve months (TTM) ended in Sep. 2016 was $161.8 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 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
=25.9 / 165.4
=15.66 %

* 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

Kratos Defense & Security Solutions Inc had a gross margin of 15.66% for the quarter that ended in Sep. 2016 => No sustainable 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 local exchange's 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 Semi-Annual Data

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
Gross_Profit 48.142.445.138.340.940.442.235.945.225.9
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