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Anglogold Ashanti Ltd (NYSE:AU)
Gross Profit
$893 Mil (TTM As of Jun. 2015)

Anglogold Ashanti Ltd's gross profit for the three months ended in Jun. 2015 was $188 Mil. Anglogold Ashanti Ltd's gross profit for the trailing twelve months (TTM) ended in Jun. 2015 was $893 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Anglogold Ashanti Ltd's gross profit for the three months ended in Jun. 2015 was $188 Mil. Anglogold Ashanti Ltd's revenue for the three months ended in Jun. 2015 was $1,018 Mil. Therefore, Anglogold Ashanti Ltd's Gross Margin for the quarter that ended in Jun. 2015 was 18.47%.

Anglogold Ashanti Ltd had a gross margin of 18.47% for the quarter that ended in Jun. 2015 => No sustainable competitive advantage

During the past 13 years, the highest Gross Margin of Anglogold Ashanti Ltd was 50.98%. The lowest was 14.84%. And the median was 35.07%.

Warning Sign:

Anglogold Ashanti Ltd gross margin has been in long term decline. The average rate of decline per year is -13.6%.


Definition

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

Anglogold Ashanti Ltd's Gross Profit for the fiscal year that ended in Dec. 2014 is calculated as

Gross Profit (A: Dec. 2014 )=Revenue - Cost of Goods Sold
=5233 - 4190
=1,043

Anglogold Ashanti Ltd's Gross Profit for the quarter that ended in Jun. 2015 is calculated as

Gross Profit (Q: Jun. 2015 )=Revenue - Cost of Goods Sold
=1018 - 830
=188

Anglogold Ashanti Ltd Gross Profit for the trailing twelve months (TTM) ended in Jun. 2015 was 273 (Sep. 2014 ) + 223 (Dec. 2014 ) + 209 (Mar. 2015 ) + 188 (Jun. 2015 ) = $893 Mil.

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

Anglogold Ashanti Ltd's Gross Margin for the quarter that ended in Jun. 2015 is calculated as

Gross Margin (Q: Jun. 2015 )=Gross Profit (Q: Jun. 2015 ) / Revenue (Q: Jun. 2015 )
=(Revenue - Cost of Goods Sold) / Revenue
=188 / 1018
=18.47 %

* 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

Anglogold Ashanti Ltd had a gross margin of 18.47% for the quarter that ended in Jun. 2015 => No sustainable 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.

Anglogold Ashanti Ltd Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
Gross_Profit 8061,0731,2461,4451,4912,5403,3862,8571,4451,043

Anglogold Ashanti Ltd Quarterly Data

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
Gross_Profit 434330276404296241273223209188
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