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Smith & Wesson Holding Corp (NAS:SWHC)
Gross Profit
$268.9 Mil (TTM As of Jan. 2016)

Smith & Wesson Holding Corp's gross profit for the three months ended in Jan. 2016 was $86.7 Mil. Smith & Wesson Holding Corp's gross profit for the trailing twelve months (TTM) ended in Jan. 2016 was $268.9 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Smith & Wesson Holding Corp's gross profit for the three months ended in Jan. 2016 was $86.7 Mil. Smith & Wesson Holding Corp's revenue for the three months ended in Jan. 2016 was $210.8 Mil. Therefore, Smith & Wesson Holding Corp's Gross Margin for the quarter that ended in Jan. 2016 was 41.11%.

Smith & Wesson Holding Corp had a gross margin of 41.11% for the quarter that ended in Jan. 2016 => Durable competitive advantage

During the past 13 years, the highest Gross Margin of Smith & Wesson Holding Corp was 41.35%. The lowest was 29.00%. And the median was 31.75%.


Definition

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

Smith & Wesson Holding Corp's Gross Profit for the fiscal year that ended in Apr. 2015 is calculated as

Gross Profit (A: Apr. 2015 )=Revenue - Cost of Goods Sold
=551.862 - 356.936
=194.9

Smith & Wesson Holding Corp's Gross Profit for the quarter that ended in Jan. 2016 is calculated as

Gross Profit (Q: Jan. 2016 )=Revenue - Cost of Goods Sold
=210.786 - 124.128
=86.7

Smith & Wesson Holding Corp Gross Profit for the trailing twelve months (TTM) ended in Jan. 2016 was 67.144 (Apr. 2015 ) + 58.87 (Jul. 2015 ) + 56.215 (Oct. 2015 ) + 86.658 (Jan. 2016 ) = $268.9 Mil.

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

Smith & Wesson Holding Corp's Gross Margin for the quarter that ended in Jan. 2016 is calculated as

Gross Margin (Q: Jan. 2016 )=Gross Profit (Q: Jan. 2016 ) / Revenue (Q: Jan. 2016 )
=(Revenue - Cost of Goods Sold) / Revenue
=86.7 / 210.786
=41.11 %

* 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

Smith & Wesson Holding Corp had a gross margin of 41.11% for the quarter that ended in Jan. 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.

Smith & Wesson Holding Corp Annual Data

Apr06Apr07Apr08Apr09Apr10Apr11Apr12Apr13Apr14Apr15
Gross_Profit 49.676.392.497.1131.4104.7127.9218.1259.1194.9

Smith & Wesson Holding Corp Quarterly Data

Oct13Jan14Apr14Jul14Oct14Jan15Apr15Jul15Oct15Jan16
Gross_Profit 57.958.769.749.134.843.867.158.956.286.7
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