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Apple Inc (NAS:AAPL)
Gross Profit
$70,537 Mil (TTM As of Sep. 2014)

Apple Inc's gross profit for the three months ended in Sep. 2014 was $16,009 Mil. Apple Inc's gross profit for the trailing twelve months (TTM) ended in Sep. 2014 was $70,537 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Apple Inc's gross profit for the three months ended in Sep. 2014 was $16,009 Mil. Apple Inc's revenue for the three months ended in Sep. 2014 was $42,123 Mil. Therefore, Apple Inc's Gross Margin for the quarter that ended in Sep. 2014 was 38.01%.

Apple Inc had a gross margin of 38.01% for the quarter that ended in Sep. 2014 => Competition eroding margins

During the past 13 years, the highest Gross Margin of Apple Inc was 43.87%. The lowest was 11.43%. And the median was 28.45%.


Definition

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

Apple Inc'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
=182795 - 112258
=70,537

Apple Inc's Gross Profit for the quarter that ended in Sep. 2014 is calculated as

Gross Profit (Q: Sep. 2014 )=Revenue - Cost of Goods Sold
=42123 - 26114
=16,009

Apple Inc Gross Profit for the trailing twelve months (TTM) ended in Sep. 2014 was 21846 (Dec. 2013 ) + 17947 (Mar. 2014 ) + 14735 (Jun. 2014 ) + 16009 (Sep. 2014 ) = $70,537 Mil.

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

Apple Inc's Gross Margin for the quarter that ended in Sep. 2014 is calculated as

Gross Margin (Q: Sep. 2014 )=Gross Profit (Q: Sep. 2014 ) / Revenue (Q: Sep. 2014 )
=(Revenue - Cost of Goods Sold) / Revenue
=16,009 / 42123
=38.01 %

* 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

Apple Inc had a gross margin of 38.01% for the quarter that ended in Sep. 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.

Apple Inc Annual Data

Sep05Sep06Sep07Sep08Sep09Sep10Sep11Sep12Sep13Sep14
Gross_Profit 4,0425,5988,15413,19717,22225,68443,81868,66264,30470,537

Apple Inc Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
Gross_Profit 14,99414,40121,06016,34913,02413,87121,84617,94714,73516,009
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