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Air Products & Chemicals Inc (NYSE:APD)
Gross Profit
\$3,119 Mil (TTM As of Sep. 2016)

Air Products & Chemicals Inc's gross profit for the three months ended in Sep. 2016 was \$814 Mil. Air Products & Chemicals Inc's gross profit for the trailing twelve months (TTM) ended in Sep. 2016 was \$3,119 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 Sep. 2016 was \$814 Mil. Air Products & Chemicals Inc's revenue for the three months ended in Sep. 2016 was \$2,463 Mil. Therefore, Air Products & Chemicals Inc's Gross Margin for the quarter that ended in Sep. 2016 was 33.06%.

Air Products & Chemicals Inc had a gross margin of 33.06% for the quarter that ended in Sep. 2016 => Competition eroding margins

During the past 13 years, the highest Gross Margin of Air Products & Chemicals Inc was 32.78%. The lowest was 26.13%. And the median was 26.74%.

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. 2016 is calculated as

 Gross Profit (A: Sep. 2016 ) = Revenue - Cost of Goods Sold = 9524.4 - 6402.7 = 3,122

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

 Gross Profit (Q: Sep. 2016 ) = Revenue - Cost of Goods Sold = 2463 - 1648.7 = 814

Air Products & Chemicals Inc Gross Profit for the trailing twelve months (TTM) ended in Sep. 2016 was 757.8 (Dec. 2015 ) + 752.2 (Mar. 2016 ) + 795.1 (Jun. 2016 ) + 814.3 (Sep. 2016 ) = \$3,119 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 Sep. 2016 is calculated as

 Gross Margin (Q: Sep. 2016 ) = Gross Profit (Q: Sep. 2016 ) / Revenue (Q: Sep. 2016 ) = (Revenue - Cost of Goods Sold) / Revenue = 814 / 2463 = 33.06 %

* 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

Air Products & Chemicals Inc had a gross margin of 33.06% for the quarter that ended in Sep. 2016 => Competition eroding margins

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.

Air Products & Chemicals Inc Annual Data

 Sep07 Sep08 Sep09 Sep10 Sep11 Sep12 Sep13 Sep14 Sep15 Sep16 Gross_Profit 2,676 2,721 2,214 2,523 2,575 2,560 2,708 2,804 2,956 3,122

Air Products & Chemicals Inc Quarterly Data

 Jun14 Sep14 Dec14 Mar15 Jun15 Sep15 Dec15 Mar16 Jun16 Sep16 Gross_Profit 716 745 730 716 755 754 758 752 795 814
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