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Tyco International Ltd (NYSE:TYC)
Gross Profit
$4,042 Mil (TTM As of Jun. 2014)

Tyco International Ltd's gross profit for the three months ended in Jun. 2014 was $984 Mil. Tyco International Ltd's gross profit for the trailing twelve months (TTM) ended in Jun. 2014 was $4,042 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Tyco International Ltd's gross profit for the three months ended in Jun. 2014 was $984 Mil. Tyco International Ltd's revenue for the three months ended in Jun. 2014 was $2,662 Mil. Therefore, Tyco International Ltd's Gross Margin for the quarter that ended in Jun. 2014 was 36.96%.

Tyco International Ltd had a gross margin of 36.96% for the quarter that ended in Jun. 2014 => Competition eroding margins

During the past 13 years, the highest Gross Margin of Tyco International Ltd was 43.73%. The lowest was 29.87%. And the median was 35.25%.


Definition

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

Tyco International Ltd's Gross Profit for the fiscal year that ended in Sep. 2013 is calculated as

Gross Profit (A: Sep. 2013 )=Revenue - Cost of Goods Sold
=10647 - 6766
=3,881

Tyco International Ltd's Gross Profit for the quarter that ended in Jun. 2014 is calculated as

Gross Profit (Q: Jun. 2014 )=Revenue - Cost of Goods Sold
=2662 - 1678
=984

Tyco International Ltd Gross Profit for the trailing twelve months (TTM) ended in Jun. 2014 was 1187 (Sep. 2013 ) + 976 (Dec. 2013 ) + 895 (Mar. 2014 ) + 984 (Jun. 2014 ) = $4,042 Mil.

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

Tyco International Ltd's Gross Margin for the quarter that ended in Jun. 2014 is calculated as

Gross Margin (Q: Jun. 2014 )=Gross Profit (Q: Jun. 2014 ) / Revenue (Q: Jun. 2014 )
=(Revenue - Cost of Goods Sold) / Revenue
=984 / 2662
=36.96 %

* 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

Tyco International Ltd had a gross margin of 36.96% for the quarter that ended in Jun. 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.

Tyco International Ltd Annual Data

Sep04Sep05Sep06Sep07Sep08Sep09Sep10Sep11Sep12Sep13
Gross_Profit 14,50213,76813,6776,3407,0766,0946,2803,6673,7773,881

Tyco International Ltd Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
Gross_Profit 9089701,0009328839311,187976895984
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