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Tribune Company (OTCPK:TRBAA)
Gross Profit
$2,296 Mil (TTM As of Sep. 2008)

Tribune Company's gross profit for the three months ended in Sep. 2008 was $443 Mil. Tribune Company's gross profit for the trailing twelve months (TTM) ended in Sep. 2008 was $2,296 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Tribune Company's gross profit for the three months ended in Sep. 2008 was $443 Mil. Tribune Company's revenue for the three months ended in Sep. 2008 was $1,037 Mil. Therefore, Tribune Company's Gross Margin for the quarter that ended in Sep. 2008 was 42.70%.

Tribune Company had a gross margin of 42.70% for the quarter that ended in Sep. 2008 => Durable competitive advantage


Definition

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

Tribune Company's Gross Profit for the fiscal year that ended in Dec. 2007 is calculated as

Gross Profit (A: Dec. 2007 )=Revenue - Cost of Goods Sold
=5062.984 - 2545.554
=2,517

Tribune Company's Gross Profit for the quarter that ended in Sep. 2008 is calculated as

Gross Profit (Q: Sep. 2008 )=Revenue - Cost of Goods Sold
=1036.946 - 594.161
=443

Tribune Company Gross Profit for the trailing twelve months (TTM) ended in Sep. 2008 was 839.631 (Dec. 2007 ) + 514.991 (Mar. 2008 ) + 498.135 (Jun. 2008 ) + 442.785 (Sep. 2008 ) = $2,296 Mil.

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

Tribune Company's Gross Margin for the quarter that ended in Sep. 2008 is calculated as

Gross Margin (Q: Sep. 2008 )=Gross Profit (Q: Sep. 2008 ) / Revenue (Q: Sep. 2008 )
=(Revenue - Cost of Goods Sold) / Revenue
=443 / 1036.946
=42.70 %

* 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

Tribune Company had a gross margin of 42.70% for the quarter that ended in Sep. 2008 => 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.

Tribune Company Annual Data

Dec98Dec99Dec00Dec01Dec02Dec03Dec04Dec05Dec06Dec07
Gross_Profit 000002,9593,0182,8152,7432,517

Tribune Company Quarterly Data

Jun06Sep06Dec06Mar07Jun07Sep07Dec07Mar08Jun08Sep08
Gross_Profit 711642760595577566840515498443
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