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Trio-Tech International (AMEX:TRT)
Gross Profit
$8.46 Mil (TTM As of Dec. 2014)

Trio-Tech International's gross profit for the three months ended in Dec. 2014 was $2.44 Mil. Trio-Tech International's gross profit for the trailing twelve months (TTM) ended in Dec. 2014 was $8.46 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Trio-Tech International's gross profit for the three months ended in Dec. 2014 was $2.44 Mil. Trio-Tech International's revenue for the three months ended in Dec. 2014 was $8.90 Mil. Therefore, Trio-Tech International's Gross Margin for the quarter that ended in Dec. 2014 was 27.46%.

Trio-Tech International had a gross margin of 27.46% for the quarter that ended in Dec. 2014 => Competition eroding margins

During the past 13 years, the highest Gross Margin of Trio-Tech International was 46.98%. The lowest was 16.52%. And the median was 24.56%.

Warning Sign:

Trio-Tech International gross margin has been in long term decline. The average rate of decline per year is -1.4%.


Definition

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

Trio-Tech International's Gross Profit for the fiscal year that ended in Jun. 2014 is calculated as

Gross Profit (A: Jun. 2014 )=Revenue - Cost of Goods Sold
=36.262 - 27.963
=8.30

Trio-Tech International's Gross Profit for the quarter that ended in Dec. 2014 is calculated as

Gross Profit (Q: Dec. 2014 )=Revenue - Cost of Goods Sold
=8.897 - 6.454
=2.44

Trio-Tech International Gross Profit for the trailing twelve months (TTM) ended in Dec. 2014 was 1.967 (Mar. 2014 ) + 2.254 (Jun. 2014 ) + 1.797 (Sep. 2014 ) + 2.443 (Dec. 2014 ) = $8.46 Mil.

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

Trio-Tech International's Gross Margin for the quarter that ended in Dec. 2014 is calculated as

Gross Margin (Q: Dec. 2014 )=Gross Profit (Q: Dec. 2014 ) / Revenue (Q: Dec. 2014 )
=(Revenue - Cost of Goods Sold) / Revenue
=2.44 / 8.897
=27.46 %

* 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

Trio-Tech International had a gross margin of 27.46% for the quarter that ended in Dec. 2014 => 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.

Trio-Tech International Annual Data

Jun05Jun06Jun07Jun08Jun09Jun10Jun11Jun12Jun13Jun14
Gross_Profit 6.057.9312.098.984.877.028.325.146.358.30

Trio-Tech International Quarterly Data

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
Gross_Profit 1.841.551.271.702.091.991.972.251.802.44
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