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Toll Brothers Inc (NYSE:TOL)
Gross Profit
\$1,061 Mil (TTM As of Jul. 2016)

Toll Brothers Inc's gross profit for the three months ended in Jul. 2016 was \$279 Mil. Toll Brothers Inc's gross profit for the trailing twelve months (TTM) ended in Jul. 2016 was \$1,061 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Toll Brothers Inc's gross profit for the three months ended in Jul. 2016 was \$279 Mil. Toll Brothers Inc's revenue for the three months ended in Jul. 2016 was \$1,270 Mil. Therefore, Toll Brothers Inc's Gross Margin for the quarter that ended in Jul. 2016 was 21.93%.

Toll Brothers Inc had a gross margin of 21.93% for the quarter that ended in Jul. 2016 => Competition eroding margins

During the past 13 years, the highest Gross Margin of Toll Brothers Inc was 28.10%. The lowest was -11.17%. And the median was 16.61%.

Definition

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

Toll Brothers Inc's Gross Profit for the fiscal year that ended in Oct. 2015 is calculated as

 Gross Profit (A: Oct. 2015 ) = Revenue - Cost of Goods Sold = 4171.248 - 3269.27 = 902

Toll Brothers Inc's Gross Profit for the quarter that ended in Jul. 2016 is calculated as

 Gross Profit (Q: Jul. 2016 ) = Revenue - Cost of Goods Sold = 1269.934 - 991.416 = 279

Toll Brothers Inc Gross Profit for the trailing twelve months (TTM) ended in Jul. 2016 was 320.87 (Oct. 2015 ) + 216.255 (Jan. 2016 ) + 244.986 (Apr. 2016 ) + 278.518 (Jul. 2016 ) = \$1,061 Mil.

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

Toll Brothers Inc's Gross Margin for the quarter that ended in Jul. 2016 is calculated as

 Gross Margin (Q: Jul. 2016 ) = Gross Profit (Q: Jul. 2016 ) / Revenue (Q: Jul. 2016 ) = (Revenue - Cost of Goods Sold) / Revenue = 279 / 1269.934 = 21.93 %

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's 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

Toll Brothers Inc had a gross margin of 21.93% for the quarter that ended in Jul. 2016 => Competition eroding margins

Related Terms

Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Toll Brothers Inc Annual Data

 Oct06 Oct07 Oct08 Oct09 Oct10 Oct11 Oct12 Oct13 Oct14 Oct15 Gross_Profit 1,721 518 28 -196 118 215 351 541 830 902

Toll Brothers Inc Quarterly Data

 Apr14 Jul14 Oct14 Jan15 Apr15 Jul15 Oct15 Jan16 Apr16 Jul16 Gross_Profit 172 240 288 203 174 204 321 216 245 279
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