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Sherwin-Williams Co (NYSE:SHW)
Gross Profit
$5,455 Mil (TTM As of Sep. 2015)

Sherwin-Williams Co's gross profit for the three months ended in Sep. 2015 was $1,575 Mil. Sherwin-Williams Co's gross profit for the trailing twelve months (TTM) ended in Sep. 2015 was $5,455 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Sherwin-Williams Co's gross profit for the three months ended in Sep. 2015 was $1,575 Mil. Sherwin-Williams Co's revenue for the three months ended in Sep. 2015 was $3,152 Mil. Therefore, Sherwin-Williams Co's Gross Margin for the quarter that ended in Sep. 2015 was 49.95%.

Sherwin-Williams Co had a gross margin of 49.95% for the quarter that ended in Sep. 2015 => Durable competitive advantage

During the past 13 years, the highest Gross Margin of Sherwin-Williams Co was 46.40%. The lowest was 42.72%. And the median was 44.44%.


Definition

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

Sherwin-Williams Co'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
=11129.533 - 5965.049
=5,164

Sherwin-Williams Co's Gross Profit for the quarter that ended in Sep. 2015 is calculated as

Gross Profit (Q: Sep. 2015 )=Revenue - Cost of Goods Sold
=3152.285 - 1577.733
=1,575

Sherwin-Williams Co Gross Profit for the trailing twelve months (TTM) ended in Sep. 2015 was 1217.975 (Dec. 2014 ) + 1132.449 (Mar. 2015 ) + 1529.986 (Jun. 2015 ) + 1574.552 (Sep. 2015 ) = $5,455 Mil.

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

Sherwin-Williams Co's Gross Margin for the quarter that ended in Sep. 2015 is calculated as

Gross Margin (Q: Sep. 2015 )=Gross Profit (Q: Sep. 2015 ) / Revenue (Q: Sep. 2015 )
=(Revenue - Cost of Goods Sold) / Revenue
=1,575 / 3152.285
=49.95 %

* 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

Sherwin-Williams Co had a gross margin of 49.95% for the quarter that ended in Sep. 2015 => 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.

Sherwin-Williams Co Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
Gross_Profit 3,4153,5993,4993,2633,4813,7454,2064,6175,1645,559

Sherwin-Williams Co Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
Gross_Profit 1,2961,1241,0661,4101,4711,2181,1321,5301,5751,322
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