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CA Inc (NAS:CA)
Gross Profit
$3,627 Mil (TTM As of Mar. 2015)

CA Inc's gross profit for the three months ended in Mar. 2015 was $858 Mil. CA Inc's gross profit for the trailing twelve months (TTM) ended in Mar. 2015 was $3,627 Mil.

Gross Margin is calculated as gross profit divided by its revenue. CA Inc's gross profit for the three months ended in Mar. 2015 was $858 Mil. CA Inc's revenue for the three months ended in Mar. 2015 was $1,023 Mil. Therefore, CA Inc's Gross Margin for the quarter that ended in Mar. 2015 was 83.87%.

CA Inc had a gross margin of 83.87% for the quarter that ended in Mar. 2015 => Durable competitive advantage

During the past 13 years, the highest Gross Margin of CA Inc was 100.00%. The lowest was 82.91%. And the median was 87.96%.


Definition

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

CA Inc's Gross Profit for the fiscal year that ended in Mar. 2015 is calculated as

Gross Profit (A: Mar. 2015 )=Revenue - Cost of Goods Sold
=4262 - 635
=3,627

CA Inc's Gross Profit for the quarter that ended in Mar. 2015 is calculated as

Gross Profit (Q: Mar. 2015 )=Revenue - Cost of Goods Sold
=1023 - 165
=858

CA Inc Gross Profit for the trailing twelve months (TTM) ended in Mar. 2015 was 916 (Jun. 2014 ) + 920 (Sep. 2014 ) + 933 (Dec. 2014 ) + 858 (Mar. 2015 ) = $3,627 Mil.

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

CA Inc's Gross Margin for the quarter that ended in Mar. 2015 is calculated as

Gross Margin (Q: Mar. 2015 )=Gross Profit (Q: Mar. 2015 ) / Revenue (Q: Mar. 2015 )
=(Revenue - Cost of Goods Sold) / Revenue
=858 / 1023
=83.87 %

* 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

CA Inc had a gross margin of 83.87% for the quarter that ended in Mar. 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.

CA Inc Annual Data

Mar06Mar07Mar08Mar09Mar10Mar11Mar12Mar13Mar14Mar15
Gross_Profit 3,2733,3733,6603,5413,7183,8484,1713,9743,7633,627

CA Inc Quarterly Data

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
Gross_Profit 1,031958939946963915916920933858
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