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TAL Education Group (NYSE:XRS)
Gross Profit
\$342.5 Mil (TTM As of May. 2016)

TAL Education Group's gross profit for the three months ended in May. 2016 was \$94.6 Mil. TAL Education Group's gross profit for the trailing twelve months (TTM) ended in May. 2016 was \$342.5 Mil.

Gross Margin is calculated as gross profit divided by its revenue. TAL Education Group's gross profit for the three months ended in May. 2016 was \$94.6 Mil. TAL Education Group's revenue for the three months ended in May. 2016 was \$195.1 Mil. Therefore, TAL Education Group's Gross Margin for the quarter that ended in May. 2016 was 48.49%.

TAL Education Group had a gross margin of 48.49% for the quarter that ended in May. 2016 => Durable competitive advantage

During the past 8 years, the highest Gross Margin of TAL Education Group was 53.21%. The lowest was 45.97%. And the median was 49.86%.

Definition

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

TAL Education Group's Gross Profit for the fiscal year that ended in Feb. 2016 is calculated as

 Gross Profit (A: Feb. 2016 ) = Revenue - Cost of Goods Sold = 619.949 - 303.635 = 316.3

TAL Education Group's Gross Profit for the quarter that ended in May. 2016 is calculated as

 Gross Profit (Q: May. 2016 ) = Revenue - Cost of Goods Sold = 195.095 - 100.487 = 94.6

TAL Education Group Gross Profit for the trailing twelve months (TTM) ended in May. 2016 was 92.875 (Aug. 2015 ) + 68.748 (Nov. 2015 ) + 86.274 (Feb. 2016 ) + 94.608 (May. 2016 ) = \$342.5 Mil.

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

TAL Education Group's Gross Margin for the quarter that ended in May. 2016 is calculated as

 Gross Margin (Q: May. 2016 ) = Gross Profit (Q: May. 2016 ) / Revenue (Q: May. 2016 ) = (Revenue - Cost of Goods Sold) / Revenue = 94.6 / 195.095 = 48.49 %

* 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

TAL Education Group had a gross margin of 48.49% for the quarter that ended in May. 2016 => 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.

TAL Education Group Annual Data

 Feb09 Feb10 Feb11 Feb12 Feb13 Feb14 Feb15 Feb16 Gross_Profit 0.0 0.0 18.9 31.9 54.4 81.9 110.2 162.4 230.9 316.3

TAL Education Group Quarterly Data

 Feb14 May14 Aug14 Nov14 Feb15 May15 Aug15 Nov15 Feb16 May16 Gross_Profit 46.2 47.3 69.1 50.4 64.0 68.4 92.9 68.7 86.3 94.6
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