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TRW Automotive Holdings Corp (NYSE:TRW)
Gross Profit
$2,049 Mil (TTM As of Mar. 2015)

TRW Automotive Holdings Corp's gross profit for the three months ended in Mar. 2015 was $483 Mil. TRW Automotive Holdings Corp's gross profit for the trailing twelve months (TTM) ended in Mar. 2015 was $2,049 Mil.

Gross Margin is calculated as gross profit divided by its revenue. TRW Automotive Holdings Corp's gross profit for the three months ended in Mar. 2015 was $483 Mil. TRW Automotive Holdings Corp's revenue for the three months ended in Mar. 2015 was $4,142 Mil. Therefore, TRW Automotive Holdings Corp's Gross Margin for the quarter that ended in Mar. 2015 was 11.66%.

TRW Automotive Holdings Corp had a gross margin of 11.66% for the quarter that ended in Mar. 2015 => No sustainable competitive advantage

During the past 13 years, the highest Gross Margin of TRW Automotive Holdings Corp was 12.37%. The lowest was 6.79%. And the median was 10.65%.


Definition

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

TRW Automotive Holdings Corp's Gross Profit for the fiscal year that ended in Dec. 2014 is calculated as

Gross Profit (A: Dec. 2014 )=Revenue - Cost of Goods Sold
=17539 - 15473
=2,066

TRW Automotive Holdings Corp's Gross Profit for the quarter that ended in Mar. 2015 is calculated as

Gross Profit (Q: Mar. 2015 )=Revenue - Cost of Goods Sold
=4142 - 3659
=483

TRW Automotive Holdings Corp Gross Profit for the trailing twelve months (TTM) ended in Mar. 2015 was 567 (Jun. 2014 ) + 475 (Sep. 2014 ) + 524 (Dec. 2014 ) + 483 (Mar. 2015 ) = $2,049 Mil.

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

TRW Automotive Holdings Corp's Gross Margin for the quarter that ended in Mar. 2015 is calculated as

Gross Margin (Q: Mar. 2015 )=Gross Profit (Q: Mar. 2015 ) / Revenue (Q: Mar. 2015 )
=(Revenue - Cost of Goods Sold) / Revenue
=483 / 4142
=11.66 %

* 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

TRW Automotive Holdings Corp had a gross margin of 11.66% for the quarter that ended in Mar. 2015 => No sustainable 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.

TRW Automotive Holdings Corp Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
Gross_Profit 1,1881,1881,2081,0189061,7221,8601,7891,9302,066

TRW Automotive Holdings Corp Quarterly Data

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
Gross_Profit 425427531450522500567475524483
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