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China Petroleum & Chemical Corp (NYSE:SNP)
Gross Profit
$59,574 Mil (TTM As of Mar. 2015)

China Petroleum & Chemical Corp's gross profit for the three months ended in Mar. 2015 was $19,130 Mil. China Petroleum & Chemical Corp's gross profit for the trailing twelve months (TTM) ended in Mar. 2015 was $59,574 Mil.

Gross Margin is calculated as gross profit divided by its revenue. China Petroleum & Chemical Corp's gross profit for the three months ended in Mar. 2015 was $19,130 Mil. China Petroleum & Chemical Corp's revenue for the three months ended in Mar. 2015 was $76,658 Mil. Therefore, China Petroleum & Chemical Corp's Gross Margin for the quarter that ended in Mar. 2015 was 24.95%.

China Petroleum & Chemical Corp had a gross margin of 24.95% for the quarter that ended in Mar. 2015 => Competition eroding margins

During the past 13 years, the highest Gross Margin of China Petroleum & Chemical Corp was 30.76%. The lowest was 13.43%. And the median was 21.17%.

Warning Sign:

China Petroleum & Chemical Corp gross margin has been in long term decline. The average rate of decline per year is -7.4%.


Definition

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

China Petroleum & Chemical Corp'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
=456632.194681 - 377209.546586
=79,423

China Petroleum & Chemical Corp's Gross Profit for the quarter that ended in Mar. 2015 is calculated as

Gross Profit (Q: Mar. 2015 )=Revenue - Cost of Goods Sold
=76658.384894 - 57528.6121886
=19,130

China Petroleum & Chemical Corp Gross Profit for the trailing twelve months (TTM) ended in Mar. 2015 was 20156.1639397 (Mar. 2014 ) + 20288.0942445 (Jun. 2014 ) + 0 (Dec. 2014 ) + 19129.7727054 (Mar. 2015 ) = $59,574 Mil.

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

China Petroleum & Chemical Corp's Gross Margin for the quarter that ended in Mar. 2015 is calculated as

Gross Margin (Q: Mar. 2015 )=Gross Profit (Q: Mar. 2015 ) / Revenue (Q: Mar. 2015 )
=(Revenue - Cost of Goods Sold) / Revenue
=19,130 / 76658.384894
=24.95 %

* 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

China Petroleum & Chemical Corp had a gross margin of 24.95% for the quarter that ended in Mar. 2015 => Competition eroding margins


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.

China Petroleum & Chemical Corp Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
Gross_Profit 20,51925,45930,27829,28750,38863,92573,20477,78783,71079,423

China Petroleum & Chemical Corp Quarterly Data

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Dec14Mar15
Gross_Profit 19,37721,44020,31318,01421,64621,66520,15620,288019,130
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