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Air Products & Chemicals Inc (NYSE:APD)
Gross Profit
$2,905 Mil (TTM As of Mar. 2015)

Air Products & Chemicals Inc's gross profit for the three months ended in Mar. 2015 was $715 Mil. Air Products & Chemicals Inc's gross profit for the trailing twelve months (TTM) ended in Mar. 2015 was $2,905 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Air Products & Chemicals Inc's gross profit for the three months ended in Mar. 2015 was $715 Mil. Air Products & Chemicals Inc's revenue for the three months ended in Mar. 2015 was $2,415 Mil. Therefore, Air Products & Chemicals Inc's Gross Margin for the quarter that ended in Mar. 2015 was 29.61%.

Air Products & Chemicals Inc had a gross margin of 29.61% for the quarter that ended in Mar. 2015 => Competition eroding margins

During the past 13 years, the highest Gross Margin of Air Products & Chemicals Inc was 50.20%. The lowest was 26.05%. And the median was 27.38%.


Definition

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

Air Products & Chemicals 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
=10439 - 7634.6
=2,804

Air Products & Chemicals Inc's Gross Profit for the quarter that ended in Mar. 2015 is calculated as

Gross Profit (Q: Mar. 2015 )=Revenue - Cost of Goods Sold
=2414.5 - 1699.6
=715

Air Products & Chemicals Inc Gross Profit for the trailing twelve months (TTM) ended in Mar. 2015 was 715.9 (Jun. 2014 ) + 744.6 (Sep. 2014 ) + 729.8 (Dec. 2014 ) + 714.9 (Mar. 2015 ) = $2,905 Mil.

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

Air Products & Chemicals Inc's Gross Margin for the quarter that ended in Mar. 2015 is calculated as

Gross Margin (Q: Mar. 2015 )=Gross Profit (Q: Mar. 2015 ) / Revenue (Q: Mar. 2015 )
=(Revenue - Cost of Goods Sold) / Revenue
=715 / 2414.5
=29.61 %

* 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 Products & Chemicals Inc had a gross margin of 29.61% for the quarter that ended in Mar. 2015 => 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.

Air Products & Chemicals Inc Annual Data

Sep05Sep06Sep07Sep08Sep09Sep10Sep11Sep12Sep13Sep14
Gross_Profit 2,1142,2802,4492,7212,2142,5232,5752,5602,7082,804

Air Products & Chemicals Inc Quarterly Data

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
Gross_Profit 662671672704680664716745730715
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