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MWI Veterinary Supply, Inc. (NAS:MWIV)
Gross Profit
$316 Mil (TTM As of Dec. 2013)

MWI Veterinary Supply, Inc.'s gross profit for the three months ended in Dec. 2013 was $89 Mil. MWI Veterinary Supply, Inc.'s gross profit for the trailing twelve months (TTM) ended in Dec. 2013 was $316 Mil.

Gross Margin is calculated as gross profit divided by its revenue. MWI Veterinary Supply, Inc.'s gross profit for the three months ended in Dec. 2013 was $89 Mil. MWI Veterinary Supply, Inc.'s revenue for the three months ended in Dec. 2013 was $687 Mil. Therefore, MWI Veterinary Supply, Inc.'s Gross Margin for the quarter that ended in Dec. 2013 was 12.96%.

MWI Veterinary Supply, Inc. had a gross margin of 12.96% for the quarter that ended in Dec. 2013 => No sustainable competitive advantage

During the past 13 years, the highest Gross Margin of MWI Veterinary Supply, Inc. was 15.06%. The lowest was 12.86%. And the median was 14.09%.

Warning Sign:

MWI Veterinary Supply, Inc. gross margin has been in long term decline. The average rate of decline per year is -2.4%.


Definition

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

MWI Veterinary Supply, Inc.'s Gross Profit for the fiscal year that ended in Sep. 2013 is calculated as

Gross Profit (A: Sep. 2013 )=Revenue - Cost of Goods Sold
=2347.485 - 2043.147
=304

MWI Veterinary Supply, Inc.'s Gross Profit for the quarter that ended in Dec. 2013 is calculated as

Gross Profit (Q: Dec. 2013 )=Revenue - Cost of Goods Sold
=687.259 - 598.171
=89

MWI Veterinary Supply, Inc. Gross Profit for the trailing twelve months (TTM) ended in Dec. 2013 was 74.679 (Mar. 2013 ) + 77.511 (Jun. 2013 ) + 75.219 (Sep. 2013 ) + 89.088 (Dec. 2013 ) = $316 Mil.

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

MWI Veterinary Supply, Inc.'s Gross Margin for the quarter that ended in Dec. 2013 is calculated as

Gross Margin (Q: Dec. 2013 )=Gross Profit (Q: Dec. 2013 ) / Revenue (Q: Dec. 2013 )
=(Revenue - Cost of Goods Sold) / Revenue
=89 / 687.259
=12.96 %

* 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

MWI Veterinary Supply, Inc. had a gross margin of 12.96% for the quarter that ended in Dec. 2013 => No sustainable 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.

MWI Veterinary Supply, Inc. Annual Data

Sep04Sep05Sep06Sep07Sep08Sep09Sep10Sep11Sep12Sep13
Gross_Profit 567088102120135165206267304

MWI Veterinary Supply, Inc. Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
Gross_Profit 50636770687775787589
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