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Acuity Brands Inc (NYSE:AYI)
Gross Profit
\$1,475 Mil (TTM As of Feb. 2017)

Acuity Brands Inc's gross profit for the three months ended in Feb. 2017 was \$336 Mil. Acuity Brands Inc's gross profit for the trailing twelve months (TTM) ended in Feb. 2017 was \$1,475 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Acuity Brands Inc's gross profit for the three months ended in Feb. 2017 was \$336 Mil. Acuity Brands Inc's revenue for the three months ended in Feb. 2017 was \$805 Mil. Therefore, Acuity Brands Inc's Gross Margin for the quarter that ended in Feb. 2017 was 41.73%.

Acuity Brands Inc had a gross margin of 41.73% for the quarter that ended in Feb. 2017 => Durable competitive advantage

During the past 13 years, the highest Gross Margin of Acuity Brands Inc was 43.64%. The lowest was 38.32%. And the median was 40.71%.

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. 2016 is calculated as

 Gross Profit (A: Aug. 2016 ) = Revenue - Cost of Goods Sold = 3291.3 - 1855.1 = 1,436

Acuity Brands Inc's Gross Profit for the quarter that ended in Feb. 2017 is calculated as

 Gross Profit (Q: Feb. 2017 ) = Revenue - Cost of Goods Sold = 804.7 - 468.9 = 336

Acuity Brands Inc Gross Profit for the trailing twelve months (TTM) ended in Feb. 2017 was 377.9 (May. 2016 ) + 402 (Aug. 2016 ) + 359.6 (Nov. 2016 ) + 335.8 (Feb. 2017 ) = \$1,475 Mil.

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

Acuity Brands Inc's Gross Margin for the quarter that ended in Feb. 2017 is calculated as

 Gross Margin (Q: Feb. 2017 ) = Gross Profit (Q: Feb. 2017 ) / Revenue (Q: Feb. 2017 ) = (Revenue - Cost of Goods Sold) / Revenue = 336 / 804.7 = 41.73 %

* 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

Acuity Brands Inc had a gross margin of 41.73% for the quarter that ended in Feb. 2017 => Durable competitive advantage

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.

Acuity Brands Inc Annual Data

 Aug07 Aug08 Aug09 Aug10 Aug11 Aug12 Aug13 Aug14 Aug15 Aug16 Gross_Profit 1,070 816 635 662 730 788 838 979 1,146 1,436

Acuity Brands Inc Quarterly Data

 Nov14 Feb15 May15 Aug15 Nov15 Feb16 May16 Aug16 Nov16 Feb17 Gross_Profit 273 256 296 321 319 337 378 402 360 336
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