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Zipcar Inc (NAS:ZIP)
Gross Profit
$105.3 Mil (TTM As of Dec. 2012)

Zipcar Inc's gross profit for the three months ended in Dec. 2012 was $26.6 Mil. Zipcar Inc's gross profit for the trailing twelve months (TTM) ended in Dec. 2012 was $105.3 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Zipcar Inc's gross profit for the three months ended in Dec. 2012 was $26.6 Mil. Zipcar Inc's revenue for the three months ended in Dec. 2012 was $70.7 Mil. Therefore, Zipcar Inc's Gross Margin for the quarter that ended in Dec. 2012 was 37.56%.

Zipcar Inc had a gross margin of 37.56% for the quarter that ended in Dec. 2012 => Competition eroding margins

During the past 5 years, the highest Gross Margin of Zipcar Inc was 37.70%. The lowest was 13.40%. And the median was 26.00%.


Definition

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

Zipcar Inc's Gross Profit for the fiscal year that ended in Dec. 2012 is calculated as

Gross Profit (A: Dec. 2012 )=Revenue - Cost of Goods Sold
=278.868 - 173.613
=105.3

Zipcar Inc's Gross Profit for the quarter that ended in Dec. 2012 is calculated as

Gross Profit (Q: Dec. 2012 )=Revenue - Cost of Goods Sold
=70.694 - 44.141
=26.6

Zipcar Inc Gross Profit for the trailing twelve months (TTM) ended in Dec. 2012 was 19.405 (Mar. 2012 ) + 26.879 (Jun. 2012 ) + 32.418 (Sep. 2012 ) + 26.553 (Dec. 2012 ) = $105.3 Mil.

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

Zipcar Inc's Gross Margin for the quarter that ended in Dec. 2012 is calculated as

Gross Margin (Q: Dec. 2012 )=Gross Profit (Q: Dec. 2012 ) / Revenue (Q: Dec. 2012 )
=(Revenue - Cost of Goods Sold) / Revenue
=26.6 / 70.694
=37.56 %

* 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

Zipcar Inc had a gross margin of 37.56% for the quarter that ended in Dec. 2012 => 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.

Zipcar Inc Annual Data

Dec08Dec09Dec10Dec11Dec12
Gross_Profit 0.00.00.00.00.014.227.448.482.5105.3

Zipcar Inc Quarterly Data

Sep10Dec10Mar11Jun11Sep11Dec11Mar12Jun12Sep12Dec12
Gross_Profit 15.715.110.121.024.722.619.426.932.426.6
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