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Gross Profit
\$2,227 Mil (TTM As of Oct. 2016)

Analog Devices Inc's gross profit for the three months ended in Oct. 2016 was \$667 Mil. Analog Devices Inc's gross profit for the trailing twelve months (TTM) ended in Oct. 2016 was \$2,227 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Analog Devices Inc's gross profit for the three months ended in Oct. 2016 was \$667 Mil. Analog Devices Inc's revenue for the three months ended in Oct. 2016 was \$1,004 Mil. Therefore, Analog Devices Inc's Gross Margin for the quarter that ended in Oct. 2016 was 66.43%.

Analog Devices Inc had a gross margin of 66.43% for the quarter that ended in Oct. 2016 => Durable competitive advantage

During the past 13 years, the highest Gross Margin of Analog Devices Inc was 66.37%. The lowest was 55.52%. And the median was 64.36%.

Definition

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

Analog Devices Inc's Gross Profit for the fiscal year that ended in Oct. 2016 is calculated as

 Gross Profit (A: Oct. 2016 ) = Revenue - Cost of Goods Sold = 3421.409 - 1194.236 = 2,227

Analog Devices Inc's Gross Profit for the quarter that ended in Oct. 2016 is calculated as

 Gross Profit (Q: Oct. 2016 ) = Revenue - Cost of Goods Sold = 1003.623 - 336.936 = 667

Analog Devices Inc Gross Profit for the trailing twelve months (TTM) ended in Oct. 2016 was 477.293 (Jan. 2016 ) + 510.903 (Apr. 2016 ) + 572.29 (Jul. 2016 ) + 666.687 (Oct. 2016 ) = \$2,227 Mil.

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

Analog Devices Inc's Gross Margin for the quarter that ended in Oct. 2016 is calculated as

 Gross Margin (Q: Oct. 2016 ) = Gross Profit (Q: Oct. 2016 ) / Revenue (Q: Oct. 2016 ) = (Revenue - Cost of Goods Sold) / Revenue = 667 / 1003.623 = 66.43 %

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's 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

Analog Devices Inc had a gross margin of 66.43% for the quarter that ended in Oct. 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 local exchange's currency.

Analog Devices Inc Annual Data

 Oct07 Oct08 Oct09 Oct10 Oct11 Oct12 Oct13 Oct14 Oct15 Oct16 Gross_Profit 1,508 1,577 1,119 1,799 1,987 1,741 1,692 1,830 2,259 2,227

Analog Devices Inc Quarterly Data

 Jul14 Oct14 Jan15 Apr15 Jul15 Oct15 Jan16 Apr16 Jul16 Oct16 Gross_Profit 476 486 504 545 569 642 477 511 572 667
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