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GuruFocus has detected 5 Warning Signs with Oil-Dri Corp of America \$ODC.
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Oil-Dri Corp of America (NYSE:ODC)
Gross Profit
\$77.3 Mil (TTM As of Jan. 2017)

Oil-Dri Corp of America's gross profit for the three months ended in Jan. 2017 was \$19.1 Mil. Oil-Dri Corp of America's gross profit for the trailing twelve months (TTM) ended in Jan. 2017 was \$77.3 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Oil-Dri Corp of America's gross profit for the three months ended in Jan. 2017 was \$19.1 Mil. Oil-Dri Corp of America's revenue for the three months ended in Jan. 2017 was \$65.2 Mil. Therefore, Oil-Dri Corp of America's Gross Margin for the quarter that ended in Jan. 2017 was 29.34%.

Oil-Dri Corp of America had a gross margin of 29.34% for the quarter that ended in Jan. 2017 => Competition eroding margins

During the past 13 years, the highest Gross Margin of Oil-Dri Corp of America was 29.62%. The lowest was 19.83%. And the median was 22.54%.

Definition

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

Oil-Dri Corp of America's Gross Profit for the fiscal year that ended in Jul. 2016 is calculated as

 Gross Profit (A: Jul. 2016 ) = Revenue - Cost of Goods Sold = 262.313 - 185.164 = 77.1

Oil-Dri Corp of America's Gross Profit for the quarter that ended in Jan. 2017 is calculated as

 Gross Profit (Q: Jan. 2017 ) = Revenue - Cost of Goods Sold = 65.174 - 46.049 = 19.1

Oil-Dri Corp of America Gross Profit for the trailing twelve months (TTM) ended in Jan. 2017 was 18.568 (Apr. 2016 ) + 18.866 (Jul. 2016 ) + 20.725 (Oct. 2016 ) + 19.125 (Jan. 2017 ) = \$77.3 Mil.

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

Oil-Dri Corp of America's Gross Margin for the quarter that ended in Jan. 2017 is calculated as

 Gross Margin (Q: Jan. 2017 ) = Gross Profit (Q: Jan. 2017 ) / Revenue (Q: Jan. 2017 ) = (Revenue - Cost of Goods Sold) / Revenue = 19.1 / 65.174 = 29.34 %

* 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

Oil-Dri Corp of America had a gross margin of 29.34% for the quarter that ended in Jan. 2017 => Competition eroding margins

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.

Oil-Dri Corp of America Annual Data

 Jul07 Jul08 Jul09 Jul10 Jul11 Jul12 Jul13 Jul14 Jul15 Jul16 Gross_Profit 45.7 46.1 49.4 49.7 50.0 59.0 66.5 59.7 60.2 77.1

Oil-Dri Corp of America Quarterly Data

 Oct14 Jan15 Apr15 Jul15 Oct15 Jan16 Apr16 Jul16 Oct16 Jan17 Gross_Profit 13.8 15.2 14.4 16.7 20.7 19.1 18.6 18.9 20.7 19.1
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