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Spirit Airlines Inc (NAS:SAVE)
Gross Profit
$944 Mil (TTM As of Dec. 2014)

Spirit Airlines Inc's gross profit for the three months ended in Dec. 2014 was $240 Mil. Spirit Airlines Inc's gross profit for the trailing twelve months (TTM) ended in Dec. 2014 was $944 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Spirit Airlines Inc's gross profit for the three months ended in Dec. 2014 was $240 Mil. Spirit Airlines Inc's revenue for the three months ended in Dec. 2014 was $474 Mil. Therefore, Spirit Airlines Inc's Gross Margin for the quarter that ended in Dec. 2014 was 67.22%.

Spirit Airlines Inc had a gross margin of 67.22% for the quarter that ended in Dec. 2014 => Durable competitive advantage

During the past 7 years, the highest Gross Margin of Spirit Airlines Inc was 51.33%. The lowest was 44.39%. And the median was 45.52%.


Definition

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

Spirit Airlines Inc'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
=1931.58 - 686.865
=1,245

Spirit Airlines Inc's Gross Profit for the quarter that ended in Dec. 2014 is calculated as

Gross Profit (Q: Dec. 2014 )=Revenue - Cost of Goods Sold
=474.487 - 155.517
=319

Spirit Airlines Inc Gross Profit for the trailing twelve months (TTM) ended in Dec. 2014 was 201.499 (Mar. 2014 ) + 251.227 (Jun. 2014 ) + 250.819 (Sep. 2014 ) + 240.228 (Dec. 2014 ) = $944 Mil.

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

Spirit Airlines Inc'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
=319 / 474.487
=67.22 %

* 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

Spirit Airlines Inc had a gross margin of 67.22% 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.

Spirit Airlines Inc Annual Data

Dec08Dec09Dec10Dec11Dec12Dec13Dec14
Gross_Profit 000358359355480585789944

Spirit Airlines Inc Quarterly Data

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
Gross_Profit 149141168194230197201251251240
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