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Tyco International PLC (NYSE:TYC)
Gross Profit
$3,601 Mil (TTM As of Dec. 2015)

Tyco International PLC's gross profit for the three months ended in Dec. 2015 was $878 Mil. Tyco International PLC's gross profit for the trailing twelve months (TTM) ended in Dec. 2015 was $3,601 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Tyco International PLC's gross profit for the three months ended in Dec. 2015 was $878 Mil. Tyco International PLC's revenue for the three months ended in Dec. 2015 was $2,376 Mil. Therefore, Tyco International PLC's Gross Margin for the quarter that ended in Dec. 2015 was 36.95%.

Tyco International PLC had a gross margin of 36.95% for the quarter that ended in Dec. 2015 => Competition eroding margins

During the past 13 years, the highest Gross Margin of Tyco International PLC was 36.68%. The lowest was 32.81%. And the median was 35.32%.


Definition

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

Tyco International PLC's Gross Profit for the fiscal year that ended in Sep. 2015 is calculated as

Gross Profit (A: Sep. 2015 )=Revenue - Cost of Goods Sold
=9902 - 6270
=3,632

Tyco International PLC's Gross Profit for the quarter that ended in Dec. 2015 is calculated as

Gross Profit (Q: Dec. 2015 )=Revenue - Cost of Goods Sold
=2376 - 1498
=878

Tyco International PLC Gross Profit for the trailing twelve months (TTM) ended in Dec. 2015 was 881 (Mar. 2015 ) + 916 (Jun. 2015 ) + 926 (Sep. 2015 ) + 878 (Dec. 2015 ) = $3,601 Mil.

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

Tyco International PLC's Gross Margin for the quarter that ended in Dec. 2015 is calculated as

Gross Margin (Q: Dec. 2015 )=Gross Profit (Q: Dec. 2015 ) / Revenue (Q: Dec. 2015 )
=(Revenue - Cost of Goods Sold) / Revenue
=878 / 2376
=36.95 %

* 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 PLC had a gross margin of 36.95% for the quarter that ended in Dec. 2015 => 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 PLC Annual Data

Sep06Sep07Sep08Sep09Sep10Sep11Sep12Sep13Sep14Sep15
Gross_Profit 5,9096,3407,0766,0123,6163,6673,5763,6693,7853,632

Tyco International PLC Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
Gross_Profit 975918902985982909881916926878
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