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MOD-PAC Corporation (NAS:MPAC)
Gross Profit
\$12.24 Mil (TTM As of Jun. 2013)

MOD-PAC Corporation's gross profit for the three months ended in Jun. 2013 was \$2.43 Mil. MOD-PAC Corporation's gross profit for the trailing twelve months (TTM) ended in Jun. 2013 was \$12.24 Mil.

Gross Margin is calculated as gross profit divided by its revenue. MOD-PAC Corporation's gross profit for the three months ended in Jun. 2013 was \$2.43 Mil. MOD-PAC Corporation's revenue for the three months ended in Jun. 2013 was \$14.29 Mil. Therefore, MOD-PAC Corporation's Gross Margin for the quarter that ended in Jun. 2013 was 17.00%.

MOD-PAC Corporation had a gross margin of 17.00% for the quarter that ended in Jun. 2013 => No sustainable competitive advantage

Definition

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

MOD-PAC Corporation's Gross Profit for the fiscal year that ended in Dec. 2012 is calculated as

 Gross Profit (A: Dec. 2012 ) = Revenue - Cost of Goods Sold = 59.284 - 48.554 = 10.73

MOD-PAC Corporation's Gross Profit for the quarter that ended in Jun. 2013 is calculated as

 Gross Profit (Q: Jun. 2013 ) = Revenue - Cost of Goods Sold = 14.294 - 11.864 = 2.43

MOD-PAC Corporation Gross Profit for the trailing twelve months (TTM) ended in Jun. 2013 was 3.302 (Sep. 2012 ) + 3.867 (Dec. 2012 ) + 2.641 (Mar. 2013 ) + 2.43 (Jun. 2013 ) = \$12.24 Mil.

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

MOD-PAC Corporation's Gross Margin for the quarter that ended in Jun. 2013 is calculated as

 Gross Margin (Q: Jun. 2013 ) = Gross Profit (Q: Jun. 2013 ) / Revenue (Q: Jun. 2013 ) = (Revenue - Cost of Goods Sold) / Revenue = 2.43 / 14.294 = 17.00 %

* 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

MOD-PAC Corporation had a gross margin of 17.00% for the quarter that ended in Jun. 2013 => No sustainable competitive advantage

Related Terms

Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

MOD-PAC Corporation Annual Data

 Dec03 Dec04 Dec05 Dec06 Dec07 Dec08 Dec09 Dec10 Dec11 Dec12 Gross_Profit 9.74 13.27 28.23 4.32 4.47 6.72 7.38 8.76 10.28 10.73

MOD-PAC Corporation Quarterly Data

 Mar11 Jun11 Sep11 Dec11 Mar12 Jun12 Sep12 Dec12 Mar13 Jun13 Gross_Profit 2.25 2.70 2.83 2.51 1.78 1.79 3.30 3.87 2.64 2.43
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