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Air Products & Chemicals Inc (NYSE:APD)
Gross Profit
$2,726 Mil (TTM As of Dec. 2013)

Air Products & Chemicals Inc's gross profit for the three months ended in Dec. 2013 was $680 Mil. Air Products & Chemicals Inc's gross profit for the trailing twelve months (TTM) ended in Dec. 2013 was $2,726 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 Dec. 2013 was $680 Mil. Air Products & Chemicals Inc's revenue for the three months ended in Dec. 2013 was $2,546 Mil. Therefore, Air Products & Chemicals Inc's Gross Margin for the quarter that ended in Dec. 2013 was 26.70%.

Air Products & Chemicals Inc had a gross margin of 26.70% for the quarter that ended in Dec. 2013 => 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 27.55%.


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. 2013 is calculated as

Gross Profit (A: Sep. 2013 )=Revenue - Cost of Goods Sold
=10180.4 - 7472.1
=2,708

Air Products & Chemicals Inc's Gross Profit for the quarter that ended in Dec. 2013 is calculated as

Gross Profit (Q: Dec. 2013 )=Revenue - Cost of Goods Sold
=2545.5 - 1865.9
=680

Air Products & Chemicals Inc Gross Profit for the trailing twelve months (TTM) ended in Dec. 2013 was 670.6 (Mar. 2013 ) + 671.8 (Jun. 2013 ) + 703.6 (Sep. 2013 ) + 679.6 (Dec. 2013 ) = $2,726 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 Dec. 2013 is calculated as

Gross Margin (Q: Dec. 2013 )=Gross Profit (Q: Dec. 2013 ) / Revenue (Q: Dec. 2013 )
=(Revenue - Cost of Goods Sold) / Revenue
=680 / 2545.5
=26.70 %

* 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 26.70% for the quarter that ended in Dec. 2013 => 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

Sep04Sep05Sep06Sep07Sep08Sep09Sep10Sep11Sep12Sep13
Gross_Profit 1,9372,1142,2802,4492,7212,2142,5232,5752,5602,708

Air Products & Chemicals Inc Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
Gross_Profit 651599629649683662671672704680
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