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CA Inc (NAS:CA)
Gross Profit
$3,480 Mil (TTM As of Sep. 2016)

CA Inc's gross profit for the three months ended in Sep. 2016 was $879 Mil. CA Inc's gross profit for the trailing twelve months (TTM) ended in Sep. 2016 was $3,480 Mil.

Gross Margin is calculated as gross profit divided by its revenue. CA Inc's gross profit for the three months ended in Sep. 2016 was $879 Mil. CA Inc's revenue for the three months ended in Sep. 2016 was $1,018 Mil. Therefore, CA Inc's Gross Margin for the quarter that ended in Sep. 2016 was 86.35%.

CA Inc had a gross margin of 86.35% for the quarter that ended in Sep. 2016 => Durable competitive advantage

During the past 13 years, the highest Gross Margin of CA Inc was 87.96%. The lowest was 82.91%. And the median was 85.56%.


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. 2016 is calculated as

Gross Profit (A: Mar. 2016 )=Revenue - Cost of Goods Sold
=4025 - 583
=3,442

CA Inc's Gross Profit for the quarter that ended in Sep. 2016 is calculated as

Gross Profit (Q: Sep. 2016 )=Revenue - Cost of Goods Sold
=1018 - 139
=879

CA Inc Gross Profit for the trailing twelve months (TTM) ended in Sep. 2016 was 886 (Dec. 2015 ) + 859 (Mar. 2016 ) + 856 (Jun. 2016 ) + 879 (Sep. 2016 ) = $3,480 Mil.

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

CA Inc's Gross Margin for the quarter that ended in Sep. 2016 is calculated as

Gross Margin (Q: Sep. 2016 )=Gross Profit (Q: Sep. 2016 ) / Revenue (Q: Sep. 2016 )
=(Revenue - Cost of Goods Sold) / Revenue
=879 / 1018
=86.35 %

* 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

CA Inc had a gross margin of 86.35% for the quarter that ended in Sep. 2016 => 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 local exchange's currency.

CA Inc Annual Data

Mar07Mar08Mar09Mar10Mar11Mar12Mar13Mar14Mar15Mar16
Gross_Profit 3,3733,6603,5413,7183,8484,1383,8753,7633,6273,442

CA Inc Quarterly Data

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
Gross_Profit 916920933858840857886859856879
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