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Verisk Analytics Inc (NAS:VRSK)
Gross Profit
$1,030 Mil (TTM As of Dec. 2014)

Verisk Analytics Inc's gross profit for the three months ended in Dec. 2014 was $271 Mil. Verisk Analytics Inc's gross profit for the trailing twelve months (TTM) ended in Dec. 2014 was $1,030 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Verisk Analytics Inc's gross profit for the three months ended in Dec. 2014 was $271 Mil. Verisk Analytics Inc's revenue for the three months ended in Dec. 2014 was $465 Mil. Therefore, Verisk Analytics Inc's Gross Margin for the quarter that ended in Dec. 2014 was 58.36%.

Verisk Analytics Inc had a gross margin of 58.36% for the quarter that ended in Dec. 2014 => Durable competitive advantage

During the past 8 years, the highest Gross Margin of Verisk Analytics Inc was 63.30%. The lowest was 52.17%. And the median was 59.13%.


Definition

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

Verisk Analytics Inc'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
=1746.726 - 716.598
=1,030

Verisk Analytics Inc's Gross Profit for the quarter that ended in Dec. 2014 is calculated as

Gross Profit (Q: Dec. 2014 )=Revenue - Cost of Goods Sold
=464.864 - 193.582
=271

Verisk Analytics Inc Gross Profit for the trailing twelve months (TTM) ended in Dec. 2014 was 239.97 (Mar. 2014 ) + 251.084 (Jun. 2014 ) + 267.792 (Sep. 2014 ) + 271.282 (Dec. 2014 ) = $1,030 Mil.

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

Verisk Analytics Inc'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
=271 / 464.864
=58.36 %

* 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

Verisk Analytics Inc had a gross margin of 58.36% for the quarter that ended in Dec. 2014 => 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.

Verisk Analytics Inc Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
Gross_Profit 004455075366757988919731,030

Verisk Analytics Inc Quarterly Data

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
Gross_Profit 242210233238256247240251268271
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