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Air T Inc (NAS:AIRT)
Gross Profit
$19.0 Mil (TTM As of Sep. 2014)

Air T Inc's gross profit for the three months ended in Sep. 2014 was $6.5 Mil. Air T Inc's gross profit for the trailing twelve months (TTM) ended in Sep. 2014 was $19.0 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Air T Inc's gross profit for the three months ended in Sep. 2014 was $6.5 Mil. Air T Inc's revenue for the three months ended in Sep. 2014 was $34.6 Mil. Therefore, Air T Inc's Gross Margin for the quarter that ended in Sep. 2014 was 18.72%.

Air T Inc had a gross margin of 18.72% for the quarter that ended in Sep. 2014 => No sustainable competitive advantage

During the past 13 years, the highest Gross Margin of Air T Inc was 20.34%. The lowest was 0.24%. And the median was 18.16%.

Warning Sign:

Air T Inc gross margin has been in long term decline. The average rate of decline per year is -6.5%.


Definition

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

Air T Inc's Gross Profit for the fiscal year that ended in Mar. 2014 is calculated as

Gross Profit (A: Mar. 2014 )=Revenue - Cost of Goods Sold
=100.772 - 84.567
=16.2

Air T 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
=34.625 - 28.143
=6.5

Air T Inc Gross Profit for the trailing twelve months (TTM) ended in Sep. 2014 was 4.761 (Dec. 2013 ) + 4.377 (Mar. 2014 ) + 3.361 (Jun. 2014 ) + 6.482 (Sep. 2014 ) = $19.0 Mil.

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

Air T 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
=6.5 / 34.625
=18.72 %

* 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

Air T Inc had a gross margin of 18.72% for the quarter that ended in Sep. 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.

Air T Inc Annual Data

Mar05Mar06Mar07Mar08Mar09Mar10Mar11Mar12Mar13Mar14
Gross_Profit 0.00.00.015.718.316.514.313.814.616.2

Air T Inc Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
Gross_Profit 3.53.24.13.93.33.84.84.43.46.5
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