Switch to:
Vitesse Semiconductor Corp (NAS:VTSS)
Gross Profit
\$62.3 Mil (TTM As of Dec. 2014)

Vitesse Semiconductor Corp's gross profit for the three months ended in Dec. 2014 was \$14.7 Mil. Vitesse Semiconductor Corp's gross profit for the trailing twelve months (TTM) ended in Dec. 2014 was \$62.3 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Vitesse Semiconductor Corp's gross profit for the three months ended in Dec. 2014 was \$14.7 Mil. Vitesse Semiconductor Corp's revenue for the three months ended in Dec. 2014 was \$24.8 Mil. Therefore, Vitesse Semiconductor Corp's Gross Margin for the quarter that ended in Dec. 2014 was 59.39%.

Vitesse Semiconductor Corp had a gross margin of 59.39% for the quarter that ended in Dec. 2014 => Durable competitive advantage

Definition

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

Vitesse Semiconductor Corp's Gross Profit for the fiscal year that ended in Sep. 2014 is calculated as

 Gross Profit (A: Sep. 2014 ) = Revenue - Cost of Goods Sold = 108.497 - 44.48 = 64.0

Vitesse Semiconductor Corp's Gross Profit for the quarter that ended in Dec. 2014 is calculated as

 Gross Profit (Q: Dec. 2014 ) = Revenue - Cost of Goods Sold = 24.755 - 10.053 = 14.7

Vitesse Semiconductor Corp Gross Profit for the trailing twelve months (TTM) ended in Dec. 2014 was 14.613 (Mar. 2014 ) + 14.897 (Jun. 2014 ) + 18.1 (Sep. 2014 ) + 14.702 (Dec. 2014 ) = \$62.3 Mil.

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

Vitesse Semiconductor Corp'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 = 14.7 / 24.755 = 59.39 %

* 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

Vitesse Semiconductor Corp had a gross margin of 59.39% for the quarter that ended in Dec. 2014 => Durable competitive advantage

Related Terms

Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Vitesse Semiconductor Corp Annual Data

 Sep05 Sep06 Sep07 Sep08 Sep09 Sep10 Sep11 Sep12 Sep13 Sep14 Gross_Profit 99.6 90.5 108.2 122.2 89.8 94.4 87.3 73.1 57.0 64.0

Vitesse Semiconductor Corp Quarterly Data

 Sep12 Dec12 Mar13 Jun13 Sep13 Dec13 Mar14 Jun14 Sep14 Dec14 Gross_Profit 17.1 14.8 13.4 14.8 14.1 16.4 14.6 14.9 18.1 14.7
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to \$400 per referral. ( Learn More)