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WGL Holdings Inc (NYSE:WGL)
Gross Profit
$691 Mil (TTM As of Jun. 2014)

WGL Holdings Inc's gross profit for the three months ended in Jun. 2014 was $137 Mil. WGL Holdings Inc's gross profit for the trailing twelve months (TTM) ended in Jun. 2014 was $691 Mil.

Gross Margin is calculated as gross profit divided by its revenue. WGL Holdings Inc's gross profit for the three months ended in Jun. 2014 was $137 Mil. WGL Holdings Inc's revenue for the three months ended in Jun. 2014 was $468 Mil. Therefore, WGL Holdings Inc's Gross Margin for the quarter that ended in Jun. 2014 was 29.25%.

WGL Holdings Inc had a gross margin of 29.25% for the quarter that ended in Jun. 2014 => Competition eroding margins

During the past 13 years, the highest Gross Margin of WGL Holdings Inc was 71.03%. The lowest was 27.65%. And the median was 53.37%.

Warning Sign:

WGL Holdings Inc gross margin has been in long term decline. The average rate of decline per year is -8.2%.


Definition

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

WGL Holdings Inc'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
=2466.138 - 1684.331
=782

WGL Holdings Inc's Gross Profit for the quarter that ended in Jun. 2014 is calculated as

Gross Profit (Q: Jun. 2014 )=Revenue - Cost of Goods Sold
=467.5 - 330.769
=137

WGL Holdings Inc Gross Profit for the trailing twelve months (TTM) ended in Jun. 2014 was 77.485 (Sep. 2013 ) + 188.065 (Dec. 2013 ) + 288.857 (Mar. 2014 ) + 136.731 (Jun. 2014 ) = $691 Mil.

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

WGL Holdings Inc'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
=137 / 467.5
=29.25 %

* 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

WGL Holdings Inc had a gross margin of 29.25% 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.

WGL Holdings Inc Annual Data

Sep04Sep05Sep06Sep07Sep08Sep09Sep10Sep11Sep12Sep13
Gross_Profit 1,3971,3901,6211,7701,759749750821840782

WGL Holdings Inc Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
Gross_Profit 29516214724532313677188289137
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