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Brocade Communications Systems Inc (NAS:BRCD)
Gross Profit
$1,428 Mil (TTM As of Apr. 2014)

Brocade Communications Systems Inc's gross profit for the three months ended in Apr. 2014 was $354 Mil. Brocade Communications Systems Inc's gross profit for the trailing twelve months (TTM) ended in Apr. 2014 was $1,428 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Brocade Communications Systems Inc's gross profit for the three months ended in Apr. 2014 was $354 Mil. Brocade Communications Systems Inc's revenue for the three months ended in Apr. 2014 was $537 Mil. Therefore, Brocade Communications Systems Inc's Gross Margin for the quarter that ended in Apr. 2014 was 65.99%.

Brocade Communications Systems Inc had a gross margin of 65.99% for the quarter that ended in Apr. 2014 => Durable competitive advantage

During the past 13 years, the highest Gross Margin of Brocade Communications Systems Inc was 63.38%. The lowest was 44.63%. And the median was 58.57%.


Definition

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

Brocade Communications Systems Inc's Gross Profit for the fiscal year that ended in Oct. 2013 is calculated as

Gross Profit (A: Oct. 2013 )=Revenue - Cost of Goods Sold
=2222.864 - 813.985
=1,409

Brocade Communications Systems Inc's Gross Profit for the quarter that ended in Apr. 2014 is calculated as

Gross Profit (Q: Apr. 2014 )=Revenue - Cost of Goods Sold
=536.91 - 182.618
=354

Brocade Communications Systems Inc Gross Profit for the trailing twelve months (TTM) ended in Apr. 2014 was 338.202 (Jul. 2013 ) + 362.64 (Oct. 2013 ) + 372.67 (Jan. 2014 ) + 354.292 (Apr. 2014 ) = $1,428 Mil.

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

Brocade Communications Systems Inc's Gross Margin for the quarter that ended in Apr. 2014 is calculated as

Gross Margin (Q: Apr. 2014 )=Gross Profit (Q: Apr. 2014 ) / Revenue (Q: Apr. 2014 )
=(Revenue - Cost of Goods Sold) / Revenue
=354 / 536.91
=65.99 %

* 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

Brocade Communications Systems Inc had a gross margin of 65.99% for the quarter that ended in Apr. 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.

Brocade Communications Systems Inc Annual Data

Oct04Oct05Oct06Oct07Oct08Oct09Oct10Oct11Oct12Oct13
Gross_Profit 3273234456618601,0341,2341,2841,3831,409

Brocade Communications Systems Inc Quarterly Data

Apr12Jul12Oct12Jan13Apr13Jul13Oct13Jan14Apr14Jul14
Gross_Profit 337340361374334338363373354362
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