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Smith & Wesson Holding Corporation (NAS:SWHC)
Gross Profit
$258.1 Mil (TTM As of Jan. 2014)

Smith & Wesson Holding Corporation's gross profit for the three months ended in Jan. 2014 was $58.7 Mil. Smith & Wesson Holding Corporation's gross profit for the trailing twelve months (TTM) ended in Jan. 2014 was $258.1 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Smith & Wesson Holding Corporation's gross profit for the three months ended in Jan. 2014 was $58.7 Mil. Smith & Wesson Holding Corporation's revenue for the three months ended in Jan. 2014 was $145.9 Mil. Therefore, Smith & Wesson Holding Corporation's Gross Margin for the quarter that ended in Jan. 2014 was 40.20%.

Smith & Wesson Holding Corporation had a gross margin of 40.20% for the quarter that ended in Jan. 2014 => Durable competitive advantage

During the past 13 years, the highest Gross Margin of Smith & Wesson Holding Corporation was 61.54%. The lowest was 24.58%. And the median was 31.22%.


Definition

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

Smith & Wesson Holding Corporation's Gross Profit for the fiscal year that ended in Apr. 2013 is calculated as

Gross Profit (A: Apr. 2013 )=Revenue - Cost of Goods Sold
=587.514 - 369.111
=218.4

Smith & Wesson Holding Corporation's Gross Profit for the quarter that ended in Jan. 2014 is calculated as

Gross Profit (Q: Jan. 2014 )=Revenue - Cost of Goods Sold
=145.881 - 87.23
=58.7

Smith & Wesson Holding Corporation Gross Profit for the trailing twelve months (TTM) ended in Jan. 2014 was 68.777 (Apr. 2013 ) + 72.773 (Jul. 2013 ) + 57.937 (Oct. 2013 ) + 58.651 (Jan. 2014 ) = $258.1 Mil.

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

Smith & Wesson Holding Corporation's Gross Margin for the quarter that ended in Jan. 2014 is calculated as

Gross Margin (Q: Jan. 2014 )=Gross Profit (Q: Jan. 2014 ) / Revenue (Q: Jan. 2014 )
=(Revenue - Cost of Goods Sold) / Revenue
=58.7 / 145.881
=40.20 %

* 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 Corporation had a gross margin of 40.20% for the quarter that ended in Jan. 2014 => 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 Corporation Annual Data

Apr04Apr05Apr06Apr07Apr08Apr09Apr10Apr11Apr12Apr13
Gross_Profit 39.140.949.676.392.497.1131.4104.7128.0218.4

Smith & Wesson Holding Corporation Quarterly Data

Oct11Jan12Apr12Jul12Oct12Jan13Apr13Jul13Oct13Jan14
Gross_Profit 24.630.046.951.248.549.968.872.857.958.7
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