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Air Products & Chemicals Inc (NYSE:APD)
Gross Profit
$3,054 Mil (TTM As of Jun. 2016)

Air Products & Chemicals Inc's gross profit for the three months ended in Jun. 2016 was $795 Mil. Air Products & Chemicals Inc's gross profit for the trailing twelve months (TTM) ended in Jun. 2016 was $3,054 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 Jun. 2016 was $795 Mil. Air Products & Chemicals Inc's revenue for the three months ended in Jun. 2016 was $2,434 Mil. Therefore, Air Products & Chemicals Inc's Gross Margin for the quarter that ended in Jun. 2016 was 32.66%.

Air Products & Chemicals Inc had a gross margin of 32.66% for the quarter that ended in Jun. 2016 => Competition eroding margins

During the past 13 years, the highest Gross Margin of Air Products & Chemicals Inc was 32.11%. The lowest was 26.05%. And the median was 26.70%.


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. 2015 is calculated as

Gross Profit (A: Sep. 2015 )=Revenue - Cost of Goods Sold
=9894.9 - 6944.1
=2,951

Air Products & Chemicals Inc's Gross Profit for the quarter that ended in Jun. 2016 is calculated as

Gross Profit (Q: Jun. 2016 )=Revenue - Cost of Goods Sold
=2434.4 - 1639.3
=795

Air Products & Chemicals Inc Gross Profit for the trailing twelve months (TTM) ended in Jun. 2016 was 748.4 (Sep. 2015 ) + 757.8 (Dec. 2015 ) + 752.2 (Mar. 2016 ) + 795.1 (Jun. 2016 ) = $3,054 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 Jun. 2016 is calculated as

Gross Margin (Q: Jun. 2016 )=Gross Profit (Q: Jun. 2016 ) / Revenue (Q: Jun. 2016 )
=(Revenue - Cost of Goods Sold) / Revenue
=795 / 2434.4
=32.66 %

* 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 32.66% for the quarter that ended in Jun. 2016 => 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

Sep06Sep07Sep08Sep09Sep10Sep11Sep12Sep13Sep14Sep15
Gross_Profit 2,2802,4492,7212,2142,5232,5752,5602,7082,8042,951

Air Products & Chemicals Inc Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
Gross_Profit 664716745730716755748758752795
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