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Contango Oil & Gas Co (AMEX:MCF)
Gross Profit
$67.9 Mil (TTM As of Mar. 2016)

Contango Oil & Gas Co's gross profit for the three months ended in Mar. 2016 was $10.0 Mil. Contango Oil & Gas Co's gross profit for the trailing twelve months (TTM) ended in Mar. 2016 was $67.9 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. 2016 was $10.0 Mil. Contango Oil & Gas Co's revenue for the three months ended in Mar. 2016 was $17.6 Mil. Therefore, Contango Oil & Gas Co's Gross Margin for the quarter that ended in Mar. 2016 was 56.75%.

Contango Oil & Gas Co had a gross margin of 56.75% for the quarter that ended in Mar. 2016 => Durable competitive advantage

During the past 13 years, the highest Gross Margin of Contango Oil & Gas Co was 89.27%. The lowest was -792.93%. And the median was 73.00%.

Warning Sign:

Contango Oil & Gas Co gross margin has been in long term decline. The average rate of decline per year is -7.5%.


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 - 80.623
=195.8

Contango Oil & Gas Co's Gross Profit for the quarter that ended in Mar. 2016 is calculated as

Gross Profit (Q: Mar. 2016 )=Revenue - Cost of Goods Sold
=17.582 - 7.604
=10.0

Contango Oil & Gas Co Gross Profit for the trailing twelve months (TTM) ended in Mar. 2016 was 24.362 (Jun. 2015 ) + 19.999 (Sep. 2015 ) + 13.568 (Dec. 2015 ) + 9.978 (Mar. 2016 ) = $67.9 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. 2016 is calculated as

Gross Margin (Q: Mar. 2016 )=Gross Profit (Q: Mar. 2016 ) / Revenue (Q: Mar. 2016 )
=(Revenue - Cost of Goods Sold) / Revenue
=10.0 / 17.582
=56.75 %

* 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 56.75% for the quarter that ended in Mar. 2016 => 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

Jun06Jun07Jun08Jun09Jun10Jun11Jun12Jun13Dec14Dec15
Gross_Profit -7.310.2104.0146.4120.8168.0153.743.5195.878.7

Contango Oil & Gas Co Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
Gross_Profit 57.669.266.853.839.420.724.420.013.610.0
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