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Boise Inc (NYSE:BZ)
Gross Profit
\$493 Mil (TTM As of Jun. 2013)

Boise Inc's gross profit for the three months ended in Jun. 2013 was \$121 Mil. Boise Inc's gross profit for the trailing twelve months (TTM) ended in Jun. 2013 was \$493 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Boise Inc's gross profit for the three months ended in Jun. 2013 was \$121 Mil. Boise Inc's revenue for the three months ended in Jun. 2013 was \$622 Mil. Therefore, Boise Inc's Gross Margin for the quarter that ended in Jun. 2013 was 19.41%.

Boise Inc had a gross margin of 19.41% for the quarter that ended in Jun. 2013 => No sustainable competitive advantage

Definition

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

Boise Inc's Gross Profit for the fiscal year that ended in Dec. 2012 is calculated as

 Gross Profit (A: Dec. 2012 ) = Revenue - Cost of Goods Sold = 2555.363 - 2023.816 = 532

Boise Inc's Gross Profit for the quarter that ended in Jun. 2013 is calculated as

 Gross Profit (Q: Jun. 2013 ) = Revenue - Cost of Goods Sold = 621.664 - 501.008 = 121

Boise Inc Gross Profit for the trailing twelve months (TTM) ended in Jun. 2013 was 137.071 (Sep. 2012 ) + 130.844 (Dec. 2012 ) + 104.603 (Mar. 2013 ) + 120.656 (Jun. 2013 ) = \$493 Mil.

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

Boise Inc's Gross Margin for the quarter that ended in Jun. 2013 is calculated as

 Gross Margin (Q: Jun. 2013 ) = Gross Profit (Q: Jun. 2013 ) / Revenue (Q: Jun. 2013 ) = (Revenue - Cost of Goods Sold) / Revenue = 121 / 621.664 = 19.41 %

* 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

Boise Inc had a gross margin of 19.41% for the quarter that ended in Jun. 2013 => No sustainable competitive advantage

Related Terms

Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Boise Inc Annual Data

 Dec07 Dec08 Dec09 Dec10 Dec11 Dec12 Gross_Profit 0 0 0 0 10 259 345 434 505 532

Boise Inc Quarterly Data

 Mar11 Jun11 Sep11 Dec11 Mar12 Jun12 Sep12 Dec12 Mar13 Jun13 Gross_Profit 115 114 143 133 138 126 137 131 105 121
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