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Murphy Oil Corp (NYSE:MUR)
Gross Profit
$3,873 Mil (TTM As of Dec. 2014)

Murphy Oil Corp's gross profit for the three months ended in Dec. 2014 was $1,008 Mil. Murphy Oil Corp's gross profit for the trailing twelve months (TTM) ended in Dec. 2014 was $3,873 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Murphy Oil Corp's gross profit for the three months ended in Dec. 2014 was $1,008 Mil. Murphy Oil Corp's revenue for the three months ended in Dec. 2014 was $1,408 Mil. Therefore, Murphy Oil Corp's Gross Margin for the quarter that ended in Dec. 2014 was 80.37%.

Murphy Oil Corp had a gross margin of 80.37% for the quarter that ended in Dec. 2014 => Durable competitive advantage

During the past 13 years, the highest Gross Margin of Murphy Oil Corp was 70.72%. The lowest was 11.07%. And the median was 16.75%.


Definition

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

Murphy Oil Corp'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
=5476.084 - 1089.888
=4,386

Murphy Oil Corp's Gross Profit for the quarter that ended in Dec. 2014 is calculated as

Gross Profit (Q: Dec. 2014 )=Revenue - Cost of Goods Sold
=1407.626 - 276.25
=1,131

Murphy Oil Corp Gross Profit for the trailing twelve months (TTM) ended in Dec. 2014 was 885.679 (Mar. 2014 ) + 928.344 (Jun. 2014 ) + 1050.086 (Sep. 2014 ) + 1008.487 (Dec. 2014 ) = $3,873 Mil.

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

Murphy Oil Corp'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
=1,131 / 1407.626
=80.37 %

* 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

Murphy Oil Corp had a gross margin of 80.37% for the quarter that ended in Dec. 2014 => 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.

Murphy Oil Corp Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
Gross_Profit 1,8161,7812,0415,7832,8432,8483,7983,1243,6353,873

Murphy Oil Corp Quarterly Data

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
Gross_Profit 7667518459911,0137858869281,0501,008
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