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Acuity Brands Inc (NYSE:AYI)
Gross Profit
$1,108 Mil (TTM As of May. 2015)

Acuity Brands Inc's gross profit for the three months ended in May. 2015 was $296 Mil. Acuity Brands Inc's gross profit for the trailing twelve months (TTM) ended in May. 2015 was $1,108 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Acuity Brands Inc's gross profit for the three months ended in May. 2015 was $296 Mil. Acuity Brands Inc's revenue for the three months ended in May. 2015 was $684 Mil. Therefore, Acuity Brands Inc's Gross Margin for the quarter that ended in May. 2015 was 43.24%.

Acuity Brands Inc had a gross margin of 43.24% for the quarter that ended in May. 2015 => Durable competitive advantage

During the past 13 years, the highest Gross Margin of Acuity Brands Inc was 42.43%. The lowest was 38.32%. And the median was 40.59%.


Definition

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

Acuity Brands 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
=2393.5 - 1414.3
=979

Acuity Brands Inc's Gross Profit for the quarter that ended in May. 2015 is calculated as

Gross Profit (Q: May. 2015 )=Revenue - Cost of Goods Sold
=683.7 - 388.1
=296

Acuity Brands Inc Gross Profit for the trailing twelve months (TTM) ended in May. 2015 was 283.5 (Aug. 2014 ) + 273 (Nov. 2014 ) + 255.7 (Feb. 2015 ) + 295.6 (May. 2015 ) = $1,108 Mil.

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

Acuity Brands Inc's Gross Margin for the quarter that ended in May. 2015 is calculated as

Gross Margin (Q: May. 2015 )=Gross Profit (Q: May. 2015 ) / Revenue (Q: May. 2015 )
=(Revenue - Cost of Goods Sold) / Revenue
=296 / 683.7
=43.24 %

* 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

Acuity Brands Inc had a gross margin of 43.24% for the quarter that ended in May. 2015 => 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.

Acuity Brands Inc Annual Data

Aug05Aug06Aug07Aug08Aug09Aug10Aug11Aug12Aug13Aug14
Gross_Profit 8499701,070816635662730788838979

Acuity Brands Inc Quarterly Data

Feb13May13Aug13Nov13Feb14May14Aug14Nov14Feb15May15
Gross_Profit 190221237237215243284273256296
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