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Sherwin-Williams Co (NYSE:SHW)
Gross Profit
$5,794 Mil (TTM As of Jun. 2016)

Sherwin-Williams Co's gross profit for the three months ended in Jun. 2016 was $1,636 Mil. Sherwin-Williams Co's gross profit for the trailing twelve months (TTM) ended in Jun. 2016 was $5,794 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Sherwin-Williams Co's gross profit for the three months ended in Jun. 2016 was $1,636 Mil. Sherwin-Williams Co's revenue for the three months ended in Jun. 2016 was $3,220 Mil. Therefore, Sherwin-Williams Co's Gross Margin for the quarter that ended in Jun. 2016 was 50.81%.

Sherwin-Williams Co had a gross margin of 50.81% for the quarter that ended in Jun. 2016 => Durable competitive advantage

During the past 13 years, the highest Gross Margin of Sherwin-Williams Co was 50.17%. The lowest was 42.72%. And the median was 44.86%.


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. 2015 is calculated as

Gross Profit (A: Dec. 2015 )=Revenue - Cost of Goods Sold
=11339.304 - 5780.078
=5,559

Sherwin-Williams Co's Gross Profit for the quarter that ended in Jun. 2016 is calculated as

Gross Profit (Q: Jun. 2016 )=Revenue - Cost of Goods Sold
=3219.525 - 1583.732
=1,636

Sherwin-Williams Co Gross Profit for the trailing twelve months (TTM) ended in Jun. 2016 was 1574.552 (Sep. 2015 ) + 1322.239 (Dec. 2015 ) + 1261.745 (Mar. 2016 ) + 1635.793 (Jun. 2016 ) = $5,794 Mil.

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

Sherwin-Williams Co's Gross Margin for the quarter that ended in Jun. 2016 is calculated as

Gross Margin (Q: Jun. 2016 )=Gross Profit (Q: Jun. 2016 ) / Revenue (Q: Jun. 2016 )
=(Revenue - Cost of Goods Sold) / Revenue
=1,636 / 3219.525
=50.81 %

* 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 50.81% for the quarter that ended in Jun. 2016 => 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

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
Gross_Profit 1,0661,4101,4711,2181,1321,5301,5751,3221,2621,636
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