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Lafarge SA (OTCPK:LFRGY)
Gross Profit
\$3,713 Mil (TTM As of Jun. 2015)

Lafarge SA's gross profit for the three months ended in Jun. 2015 was \$1,037 Mil. Lafarge SA's gross profit for the trailing twelve months (TTM) ended in Jun. 2015 was \$3,713 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Lafarge SA's gross profit for the three months ended in Jun. 2015 was \$1,037 Mil. Lafarge SA's revenue for the three months ended in Jun. 2015 was \$3,973 Mil. Therefore, Lafarge SA's Gross Margin for the quarter that ended in Jun. 2015 was 26.10%.

Lafarge SA had a gross margin of 26.10% for the quarter that ended in Jun. 2015 => Competition eroding margins

During the past 13 years, the highest Gross Margin of Lafarge SA was 27.90%. The lowest was 23.40%. And the median was 26.35%.

Warning Sign:

Lafarge SA gross margin has been in long term decline. The average rate of decline per year is -2.4%.

Definition

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

Lafarge SA's Gross Profit for the fiscal year that ended in Dec. 2014 is calculated as

 Gross Profit (A: Dec. 2014 ) = Revenue - Cost of Goods Sold = 15836.0049322 - 12130.702836 = 3,705

Lafarge SA's Gross Profit for the quarter that ended in Jun. 2015 is calculated as

 Gross Profit (Q: Jun. 2015 ) = Revenue - Cost of Goods Sold = 3973.06397306 - 2936.02693603 = 1,037

Lafarge SA Gross Profit for the trailing twelve months (TTM) ended in Jun. 2015 was 1243.55670103 (Sep. 2014 ) + 906.288532676 (Dec. 2014 ) + 525.974025974 (Mar. 2015 ) + 1037.03703704 (Jun. 2015 ) = \$3,713 Mil.

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

Lafarge SA's Gross Margin for the quarter that ended in Jun. 2015 is calculated as

 Gross Margin (Q: Jun. 2015 ) = Gross Profit (Q: Jun. 2015 ) / Revenue (Q: Jun. 2015 ) = (Revenue - Cost of Goods Sold) / Revenue = 1,037 / 3973.06397306 = 26.10 %

* 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

Lafarge SA had a gross margin of 26.10% for the quarter that ended in Jun. 2015 => Competition eroding margins

Related Terms

Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Lafarge SA Annual Data

 Dec05 Dec06 Dec07 Dec08 Dec09 Dec10 Dec11 Dec12 Dec13 Dec14 Gross_Profit 4,629 5,975 7,153 7,168 6,089 5,177 4,812 5,094 4,317 3,705

Lafarge SA Quarterly Data

 Mar13 Jun13 Sep13 Dec13 Mar14 Jun14 Sep14 Dec14 Mar15 Jun15 Gross_Profit 558 1,232 1,370 1,037 588 1,196 1,244 906 526 1,037
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