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Mercer International Inc (NAS:MERC)
Gross Profit
$223 Mil (TTM As of Sep. 2015)

Mercer International Inc's gross profit for the three months ended in Sep. 2015 was $56 Mil. Mercer International Inc's gross profit for the trailing twelve months (TTM) ended in Sep. 2015 was $223 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Mercer International Inc's gross profit for the three months ended in Sep. 2015 was $56 Mil. Mercer International Inc's revenue for the three months ended in Sep. 2015 was $271 Mil. Therefore, Mercer International Inc's Gross Margin for the quarter that ended in Sep. 2015 was 20.86%.

Mercer International Inc had a gross margin of 20.86% for the quarter that ended in Sep. 2015 => Competition eroding margins

During the past 13 years, the highest Gross Margin of Mercer International Inc was 22.33%. The lowest was 2.27%. And the median was 12.31%.


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 Sep. 2015 is calculated as

Gross Profit (Q: Sep. 2015 )=Revenue - Cost of Goods Sold
=270.893 - 214.396
=56

Mercer International Inc Gross Profit for the trailing twelve months (TTM) ended in Sep. 2015 was 65.622 (Dec. 2014 ) + 55.295 (Mar. 2015 ) + 45.25 (Jun. 2015 ) + 56.497 (Sep. 2015 ) = $223 Mil.

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

Mercer International Inc's Gross Margin for the quarter that ended in Sep. 2015 is calculated as

Gross Margin (Q: Sep. 2015 )=Gross Profit (Q: Sep. 2015 ) / Revenue (Q: Sep. 2015 )
=(Revenue - Cost of Goods Sold) / Revenue
=56 / 270.893
=20.86 %

* 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 20.86% for the quarter that ended in Sep. 2015 => 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

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
Gross_Profit 139146532026719411589210212

Mercer International Inc Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
Gross_Profit 30235035596655455655
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