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Mercer International Inc (NAS:MERC)
Gross Profit
$210 Mil (TTM As of Dec. 2014)

Mercer International Inc's gross profit for the three months ended in Dec. 2014 was $66 Mil. Mercer International Inc's gross profit for the trailing twelve months (TTM) ended in Dec. 2014 was $210 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Mercer International Inc's gross profit for the three months ended in Dec. 2014 was $66 Mil. Mercer International Inc's revenue for the three months ended in Dec. 2014 was $283 Mil. Therefore, Mercer International Inc's Gross Margin for the quarter that ended in Dec. 2014 was 23.22%.

Mercer International Inc had a gross margin of 23.22% for the quarter that ended in Dec. 2014 => Competition eroding margins

During the past 13 years, the highest Gross Margin of Mercer International Inc was 35.42%. The lowest was 2.27%. And the median was 14.21%.


Definition

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

Mercer International Inc'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
=1175.112 - 965.387
=210

Mercer International Inc's Gross Profit for the quarter that ended in Dec. 2014 is calculated as

Gross Profit (Q: Dec. 2014 )=Revenue - Cost of Goods Sold
=282.625 - 217.003
=66

Mercer International Inc Gross Profit for the trailing twelve months (TTM) ended in Dec. 2014 was 49.679 (Mar. 2014 ) + 34.959 (Jun. 2014 ) + 59.465 (Sep. 2014 ) + 65.622 (Dec. 2014 ) = $210 Mil.

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

Mercer International Inc's Gross Margin for the quarter that ended in Dec. 2014 is calculated as

Gross Margin (Q: Dec. 2014 )=Gross Profit (Q: Dec. 2014 ) / Revenue (Q: Dec. 2014 )
=(Revenue - Cost of Goods Sold) / Revenue
=66 / 282.625
=23.22 %

* 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

Mercer International Inc had a gross margin of 23.22% for the quarter that ended in Dec. 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.

Mercer International Inc Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
Gross_Profit 43147139532026719411289210

Mercer International Inc Quarterly Data

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
Gross_Profit 22212411302450355966
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