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Apollo Education Group Inc (NAS:APOL)
Gross Profit
$1,723 Mil (TTM As of Aug. 2014)

Apollo Education Group Inc's gross profit for the three months ended in Aug. 2014 was $375 Mil. Apollo Education Group Inc's gross profit for the trailing twelve months (TTM) ended in Aug. 2014 was $1,723 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Apollo Education Group Inc's gross profit for the three months ended in Aug. 2014 was $375 Mil. Apollo Education Group Inc's revenue for the three months ended in Aug. 2014 was $689 Mil. Therefore, Apollo Education Group Inc's Gross Margin for the quarter that ended in Aug. 2014 was 54.42%.

Apollo Education Group Inc had a gross margin of 54.42% for the quarter that ended in Aug. 2014 => Durable competitive advantage

During the past 13 years, the highest Gross Margin of Apollo Education Group Inc was 64.82%. The lowest was 40.02%. And the median was 54.83%.

Warning Sign:

Apollo Education Group Inc gross margin has been in long term decline. The average rate of decline per year is -2%.


Definition

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

Apollo Education Group Inc's Gross Profit for the fiscal year that ended in Aug. 2014 is calculated as

Gross Profit (A: Aug. 2014 )=Revenue - Cost of Goods Sold
=3024.178 - 1301.004
=1,723

Apollo Education Group Inc's Gross Profit for the quarter that ended in Aug. 2014 is calculated as

Gross Profit (Q: Aug. 2014 )=Revenue - Cost of Goods Sold
=688.866 - 313.986
=375

Apollo Education Group Inc Gross Profit for the trailing twelve months (TTM) ended in Aug. 2014 was 516.656 (Nov. 2013 ) + 359.483 (Feb. 2014 ) + 472.155 (May. 2014 ) + 374.88 (Aug. 2014 ) = $1,723 Mil.

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

Apollo Education Group Inc's Gross Margin for the quarter that ended in Aug. 2014 is calculated as

Gross Margin (Q: Aug. 2014 )=Gross Profit (Q: Aug. 2014 ) / Revenue (Q: Aug. 2014 )
=(Revenue - Cost of Goods Sold) / Revenue
=375 / 688.866
=54.42 %

* 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

Apollo Education Group Inc had a gross margin of 54.42% for the quarter that ended in Aug. 2014 => Durable 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.

Apollo Education Group Inc Annual Data

Aug05Aug06Aug07Aug08Aug09Aug10Aug11Aug12Aug13Aug14
Gross_Profit 1,3161,3651,4861,7702,3713,1932,9592,4532,1021,723

Apollo Education Group Inc Quarterly Data

May12Aug12Nov12Feb13May13Aug13Nov13Feb14May14Aug14
Gross_Profit 661530623451488679517359472375
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