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AmerisourceBergen Corp (NYSE:ABC)
Gross Profit
$2,677 Mil (TTM As of Jun. 2014)

AmerisourceBergen Corp's gross profit for the three months ended in Jun. 2014 was $692 Mil. AmerisourceBergen Corp's gross profit for the trailing twelve months (TTM) ended in Jun. 2014 was $2,677 Mil.

Gross Margin is calculated as gross profit divided by its revenue. AmerisourceBergen Corp's gross profit for the three months ended in Jun. 2014 was $692 Mil. AmerisourceBergen Corp's revenue for the three months ended in Jun. 2014 was $30,348 Mil. Therefore, AmerisourceBergen Corp's Gross Margin for the quarter that ended in Jun. 2014 was 2.28%.

AmerisourceBergen Corp had a gross margin of 2.28% for the quarter that ended in Jun. 2014 => No sustainable competitive advantage

During the past 13 years, the highest Gross Margin of AmerisourceBergen Corp was 5.76%. The lowest was 2.85%. And the median was 4.20%.


Definition

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

AmerisourceBergen Corp'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
=87959.167 - 85451.348
=2,508

AmerisourceBergen Corp's Gross Profit for the quarter that ended in Jun. 2014 is calculated as

Gross Profit (Q: Jun. 2014 )=Revenue - Cost of Goods Sold
=30348.154 - 29656.15
=692

AmerisourceBergen Corp Gross Profit for the trailing twelve months (TTM) ended in Jun. 2014 was 567.552 (Sep. 2013 ) + 688.225 (Dec. 2013 ) + 729.593 (Mar. 2014 ) + 692.004 (Jun. 2014 ) = $2,677 Mil.

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

AmerisourceBergen Corp'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
=692 / 30348.154
=2.28 %

* 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

AmerisourceBergen Corp had a gross margin of 2.28% for the quarter that ended in Jun. 2014 => No sustainable competitive advantage


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.

AmerisourceBergen Corp Annual Data

Sep04Sep05Sep06Sep07Sep08Sep09Sep10Sep11Sep12Sep13
Gross_Profit 2,1661,9802,2322,32702,1002,3572,5022,6352,508

AmerisourceBergen Corp Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
Gross_Profit 680668714661717562568688730692
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