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China Petroleum & Chemical Corp (NYSE:SNP)
Gross Profit
$80,306 Mil (TTM As of Sep. 2015)

China Petroleum & Chemical Corp's gross profit for the three months ended in Sep. 2015 was $19,501 Mil. China Petroleum & Chemical Corp's gross profit for the trailing twelve months (TTM) ended in Sep. 2015 was $80,306 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 Sep. 2015 was $19,501 Mil. China Petroleum & Chemical Corp's revenue for the three months ended in Sep. 2015 was $77,969 Mil. Therefore, China Petroleum & Chemical Corp's Gross Margin for the quarter that ended in Sep. 2015 was 25.01%.

China Petroleum & Chemical Corp had a gross margin of 25.01% for the quarter that ended in Sep. 2015 => Competition eroding margins

During the past 13 years, the highest Gross Margin of China Petroleum & Chemical Corp was 26.31%. The lowest was 13.43%. And the median was 18.53%.

Warning Sign:

China Petroleum & Chemical Corp gross margin has been in long term decline. The average rate of decline per year is -7.8%.


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 Sep. 2015 is calculated as

Gross Profit (Q: Sep. 2015 )=Revenue - Cost of Goods Sold
=77968.936491 - 58467.5544946
=19,501

China Petroleum & Chemical Corp Gross Profit for the trailing twelve months (TTM) ended in Sep. 2015 was 17406.6832563 (Dec. 2014 ) + 19129.7727054 (Mar. 2015 ) + 24268.0332624 (Jun. 2015 ) + 19501.3819964 (Sep. 2015 ) = $80,306 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 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
=19,501 / 77968.936491
=25.01 %

* 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 25.01% for the quarter that ended in Sep. 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 20,51925,45930,27829,28750,38863,11972,58975,29583,71079,423

China Petroleum & Chemical Corp Quarterly Data

Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15
Gross_Profit 19,26021,64621,66520,15620,28820,75717,40719,13024,26819,501
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