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AmerisourceBergen Corp (NYSE:ABC)
Gross Profit
$3,905 Mil (TTM As of Mar. 2016)

AmerisourceBergen Corp's gross profit for the three months ended in Mar. 2016 was $1,075 Mil. AmerisourceBergen Corp's gross profit for the trailing twelve months (TTM) ended in Mar. 2016 was $3,905 Mil.

Gross Margin is calculated as gross profit divided by its revenue. AmerisourceBergen Corp's gross profit for the three months ended in Mar. 2016 was $1,075 Mil. AmerisourceBergen Corp's revenue for the three months ended in Mar. 2016 was $35,698 Mil. Therefore, AmerisourceBergen Corp's Gross Margin for the quarter that ended in Mar. 2016 was 3.01%.

AmerisourceBergen Corp had a gross margin of 3.01% for the quarter that ended in Mar. 2016 => No sustainable competitive advantage

During the past 13 years, the highest Gross Margin of AmerisourceBergen Corp was 3.65%. The lowest was 2.49%. And the median was 2.98%.

Warning Sign:

AmerisourceBergen Corp gross margin has been in long term decline. The average rate of decline per year is -4.6%.


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. 2015 is calculated as

Gross Profit (A: Sep. 2015 )=Revenue - Cost of Goods Sold
=135961.803 - 132432.49
=3,529

AmerisourceBergen Corp's Gross Profit for the quarter that ended in Mar. 2016 is calculated as

Gross Profit (Q: Mar. 2016 )=Revenue - Cost of Goods Sold
=35698.357 - 34623.026
=1,075

AmerisourceBergen Corp Gross Profit for the trailing twelve months (TTM) ended in Mar. 2016 was 891.464 (Jun. 2015 ) + 973.574 (Sep. 2015 ) + 964.877 (Dec. 2015 ) + 1075.331 (Mar. 2016 ) = $3,905 Mil.

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

AmerisourceBergen Corp's Gross Margin for the quarter that ended in Mar. 2016 is calculated as

Gross Margin (Q: Mar. 2016 )=Gross Profit (Q: Mar. 2016 ) / Revenue (Q: Mar. 2016 )
=(Revenue - Cost of Goods Sold) / Revenue
=1,075 / 35698.357
=3.01 %

* 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

AmerisourceBergen Corp had a gross margin of 3.01% for the quarter that ended in Mar. 2016 => 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

Sep06Sep07Sep08Sep09Sep10Sep11Sep12Sep13Sep14Sep15
Gross_Profit 2,2322,3272,0472,1002,3572,5392,6692,5082,9823,529

AmerisourceBergen Corp Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
Gross_Profit 6887306928737529128919749651,075
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