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Maxim Integrated Products Inc (NAS:MXIM)
Gross Profit
\$1,304 Mil (TTM As of Sep. 2016)

Maxim Integrated Products Inc's gross profit for the three months ended in Sep. 2016 was \$346 Mil. Maxim Integrated Products Inc's gross profit for the trailing twelve months (TTM) ended in Sep. 2016 was \$1,304 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Maxim Integrated Products Inc's gross profit for the three months ended in Sep. 2016 was \$346 Mil. Maxim Integrated Products Inc's revenue for the three months ended in Sep. 2016 was \$561 Mil. Therefore, Maxim Integrated Products Inc's Gross Margin for the quarter that ended in Sep. 2016 was 61.58%.

Maxim Integrated Products Inc had a gross margin of 61.58% for the quarter that ended in Sep. 2016 => Durable competitive advantage

During the past 13 years, the highest Gross Margin of Maxim Integrated Products Inc was 61.88%. The lowest was 51.57%. And the median was 60.03%.

Warning Sign:

Maxim Integrated Products Inc gross margin has been in long term decline. The average rate of decline per year is -2.2%.

Definition

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

Maxim Integrated Products Inc's Gross Profit for the fiscal year that ended in Jun. 2016 is calculated as

 Gross Profit (A: Jun. 2016 ) = Revenue - Cost of Goods Sold = 2194.719 - 950.331 = 1,244

Maxim Integrated Products Inc's Gross Profit for the quarter that ended in Sep. 2016 is calculated as

 Gross Profit (Q: Sep. 2016 ) = Revenue - Cost of Goods Sold = 561.396 - 215.664 = 346

Maxim Integrated Products Inc Gross Profit for the trailing twelve months (TTM) ended in Sep. 2016 was 292.169 (Dec. 2015 ) + 318.841 (Mar. 2016 ) + 347.027 (Jun. 2016 ) + 345.732 (Sep. 2016 ) = \$1,304 Mil.

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

Maxim Integrated Products Inc's Gross Margin for the quarter that ended in Sep. 2016 is calculated as

 Gross Margin (Q: Sep. 2016 ) = Gross Profit (Q: Sep. 2016 ) / Revenue (Q: Sep. 2016 ) = (Revenue - Cost of Goods Sold) / Revenue = 346 / 561.396 = 61.58 %

* 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

Maxim Integrated Products Inc had a gross margin of 61.58% for the quarter that ended in Sep. 2016 => Durable competitive advantage

Related Terms

Historical Data

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

Maxim Integrated Products Inc Annual Data

 Jun07 Jun08 Jun09 Jun10 Jun11 Jun12 Jun13 Jun14 Jun15 Jun16 Gross_Profit 1,216 1,238 849 1,193 1,530 1,451 1,497 1,385 1,272 1,244

Maxim Integrated Products Inc Quarterly Data

 Jun14 Sep14 Dec14 Mar15 Jun15 Sep15 Dec15 Mar16 Jun16 Sep16 Gross_Profit 369 339 314 315 304 286 292 319 347 346
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