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Marcus & Millichap Inc (NYSE:MMI)
Gross Profit
$272.7 Mil (TTM As of Dec. 2016)

Marcus & Millichap Inc's gross profit for the three months ended in Dec. 2016 was $67.5 Mil. Marcus & Millichap Inc's gross profit for the trailing twelve months (TTM) ended in Dec. 2016 was $272.7 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Marcus & Millichap Inc's gross profit for the three months ended in Dec. 2016 was $67.5 Mil. Marcus & Millichap Inc's revenue for the three months ended in Dec. 2016 was $189.2 Mil. Therefore, Marcus & Millichap Inc's Gross Margin for the quarter that ended in Dec. 2016 was 35.70%.

Marcus & Millichap Inc had a gross margin of 35.70% for the quarter that ended in Dec. 2016 => Competition eroding margins

During the past 7 years, the highest Gross Margin of Marcus & Millichap Inc was 42.98%. The lowest was 38.01%. And the median was 39.29%.


Definition

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

Marcus & Millichap Inc's Gross Profit for the fiscal year that ended in Dec. 2016 is calculated as

Gross Profit (A: Dec. 2016 )=Revenue - Cost of Goods Sold
=717.45 - 444.768
=272.7

Marcus & Millichap Inc's Gross Profit for the quarter that ended in Dec. 2016 is calculated as

Gross Profit (Q: Dec. 2016 )=Revenue - Cost of Goods Sold
=189.157 - 121.637
=67.5

Marcus & Millichap Inc Gross Profit for the trailing twelve months (TTM) ended in Dec. 2016 was 68.119 (Mar. 2016 ) + 70.261 (Jun. 2016 ) + 66.782 (Sep. 2016 ) + 67.52 (Dec. 2016 ) = $272.7 Mil.

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

Marcus & Millichap Inc's Gross Margin for the quarter that ended in Dec. 2016 is calculated as

Gross Margin (Q: Dec. 2016 )=Gross Profit (Q: Dec. 2016 ) / Revenue (Q: Dec. 2016 )
=(Revenue - Cost of Goods Sold) / Revenue
=67.5 / 189.157
=35.70 %

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's 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

Marcus & Millichap Inc had a gross margin of 35.70% for the quarter that ended in Dec. 2016 => 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 local exchange's currency.

Marcus & Millichap Inc Annual Data

Dec10Dec11Dec12Dec13Dec14Dec15Dec16
Gross_Profit 0.00.00.093.7112.2155.5171.3222.1265.7272.7

Marcus & Millichap Inc Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
Gross_Profit 58.662.660.467.963.973.568.170.366.867.5
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