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Contango Oil & Gas Co (AMEX:MCF)
Gross Profit
$164.9 Mil (TTM As of Mar. 2015)

Contango Oil & Gas Co's gross profit for the three months ended in Mar. 2015 was $20.7 Mil. Contango Oil & Gas Co's gross profit for the trailing twelve months (TTM) ended in Mar. 2015 was $164.9 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Contango Oil & Gas Co's gross profit for the three months ended in Mar. 2015 was $20.7 Mil. Contango Oil & Gas Co's revenue for the three months ended in Mar. 2015 was $30.6 Mil. Therefore, Contango Oil & Gas Co's Gross Margin for the quarter that ended in Mar. 2015 was 67.66%.

Contango Oil & Gas Co had a gross margin of 67.66% for the quarter that ended in Mar. 2015 => Durable competitive advantage

During the past 13 years, the highest Gross Margin of Contango Oil & Gas Co was 89.50%. The lowest was -5493.42%. And the median was 71.66%.

Warning Sign:

Contango Oil & Gas Co gross margin has been in long term decline. The average rate of decline per year is -8.4%.


Definition

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

Contango Oil & Gas Co'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
=276.458 - 47.236
=229.2

Contango Oil & Gas Co's Gross Profit for the quarter that ended in Mar. 2015 is calculated as

Gross Profit (Q: Mar. 2015 )=Revenue - Cost of Goods Sold
=30.647 - 9.911
=20.7

Contango Oil & Gas Co Gross Profit for the trailing twelve months (TTM) ended in Mar. 2015 was 55.99 (Jun. 2014 ) + 49.042 (Sep. 2014 ) + 39.104 (Dec. 2014 ) + 20.736 (Mar. 2015 ) = $164.9 Mil.

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

Contango Oil & Gas Co's Gross Margin for the quarter that ended in Mar. 2015 is calculated as

Gross Margin (Q: Mar. 2015 )=Gross Profit (Q: Mar. 2015 ) / Revenue (Q: Mar. 2015 )
=(Revenue - Cost of Goods Sold) / Revenue
=20.7 / 30.647
=67.66 %

* 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

Contango Oil & Gas Co had a gross margin of 67.66% for the quarter that ended in Mar. 2015 => 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.

Contango Oil & Gas Co Annual Data

Jun05Jun06Jun07Jun08Jun09Jun10Jun11Jun12Jun13Dec14
Gross_Profit -4.8-6.010.9103.4141.2142.3166.3153.743.5195.8

Contango Oil & Gas Co Quarterly Data

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
Gross_Profit 23.321.920.029.10.069.256.049.039.120.7
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