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Kratos Defense & Security Solutions Inc (NAS:KTOS)
Gross Profit
$223.5 Mil (TTM As of Sep. 2014)

Kratos Defense & Security Solutions Inc's gross profit for the three months ended in Sep. 2014 was $53.0 Mil. Kratos Defense & Security Solutions Inc's gross profit for the trailing twelve months (TTM) ended in Sep. 2014 was $223.5 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 Sep. 2014 was $53.0 Mil. Kratos Defense & Security Solutions Inc's revenue for the three months ended in Sep. 2014 was $217.1 Mil. Therefore, Kratos Defense & Security Solutions Inc's Gross Margin for the quarter that ended in Sep. 2014 was 24.41%.

Kratos Defense & Security Solutions Inc had a gross margin of 24.41% for the quarter that ended in Sep. 2014 => Competition eroding margins

During the past 13 years, the highest Gross Margin of Kratos Defense & Security Solutions Inc was 48.55%. The lowest was 16.32%. And the median was 25.54%.


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. 2013 is calculated as

Gross Profit (A: Dec. 2013 )=Revenue - Cost of Goods Sold
=950.6 - 710.6
=240.0

Kratos Defense & Security Solutions Inc's Gross Profit for the quarter that ended in Sep. 2014 is calculated as

Gross Profit (Q: Sep. 2014 )=Revenue - Cost of Goods Sold
=217.1 - 164.1
=53.0

Kratos Defense & Security Solutions Inc Gross Profit for the trailing twelve months (TTM) ended in Sep. 2014 was 61.5 (Dec. 2013 ) + 52.6 (Mar. 2014 ) + 56.4 (Jun. 2014 ) + 53 (Sep. 2014 ) = $223.5 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. 2014 is calculated as

Gross Margin (Q: Sep. 2014 )=Gross Profit (Q: Sep. 2014 ) / Revenue (Q: Sep. 2014 )
=(Revenue - Cost of Goods Sold) / Revenue
=53.0 / 217.1
=24.41 %

* 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 24.41% for the quarter that ended in Sep. 2014 => 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

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Gross_Profit 84.084.353.531.659.563.690.0192.2257.2240.0

Kratos Defense & Security Solutions Inc Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
Gross_Profit 57.774.168.065.760.452.361.552.656.453.0
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