Switch to:
Microsoft Corp (NAS:MSFT)
Gross Profit
$60,542 Mil (TTM As of Jun. 2015)

Microsoft Corp's gross profit for the three months ended in Jun. 2015 was $14,712 Mil. Microsoft Corp's gross profit for the trailing twelve months (TTM) ended in Jun. 2015 was $60,542 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Microsoft Corp's gross profit for the three months ended in Jun. 2015 was $14,712 Mil. Microsoft Corp's revenue for the three months ended in Jun. 2015 was $22,180 Mil. Therefore, Microsoft Corp's Gross Margin for the quarter that ended in Jun. 2015 was 66.33%.

Microsoft Corp had a gross margin of 66.33% for the quarter that ended in Jun. 2015 => Durable competitive advantage

During the past 13 years, the highest Gross Margin of Microsoft Corp was 91.83%. The lowest was 64.70%. And the median was 81.44%.

Warning Sign:

Microsoft Corp gross margin has been in long term decline. The average rate of decline per year is -4.1%.


Definition

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

Microsoft Corp's Gross Profit for the fiscal year that ended in Jun. 2015 is calculated as

Gross Profit (A: Jun. 2015 )=Revenue - Cost of Goods Sold
=93580 - 33038
=60,542

Microsoft Corp's Gross Profit for the quarter that ended in Jun. 2015 is calculated as

Gross Profit (Q: Jun. 2015 )=Revenue - Cost of Goods Sold
=22180 - 7468
=14,712

Microsoft Corp Gross Profit for the trailing twelve months (TTM) ended in Jun. 2015 was 14928 (Sep. 2014 ) + 16334 (Dec. 2014 ) + 14568 (Mar. 2015 ) + 14712 (Jun. 2015 ) = $60,542 Mil.

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

Microsoft Corp's Gross Margin for the quarter that ended in Jun. 2015 is calculated as

Gross Margin (Q: Jun. 2015 )=Gross Profit (Q: Jun. 2015 ) / Revenue (Q: Jun. 2015 )
=(Revenue - Cost of Goods Sold) / Revenue
=14,712 / 22180
=66.33 %

* 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

Microsoft Corp had a gross margin of 66.33% for the quarter that ended in Jun. 2015 => 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.

Microsoft Corp Annual Data

Jun06Jun07Jun08Jun09Jun10Jun11Jun12Jun13Jun14Jun15
Gross_Profit 36,63240,42948,82246,28250,08954,36656,19357,60059,75560,542

Microsoft Corp Quarterly Data

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
Gross_Profit 15,70214,29413,38416,19714,42515,74914,92816,33414,56814,712
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)

GuruFocus Premium Plus Membership

FEEDBACK