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ConAgra Foods Inc (NYSE:CAG)
Gross Profit
$3,780 Mil (TTM As of Feb. 2014)

ConAgra Foods Inc's gross profit for the three months ended in Feb. 2014 was $975 Mil. ConAgra Foods Inc's gross profit for the trailing twelve months (TTM) ended in Feb. 2014 was $3,780 Mil.

Gross Margin is calculated as gross profit divided by its revenue. ConAgra Foods Inc's gross profit for the three months ended in Feb. 2014 was $975 Mil. ConAgra Foods Inc's revenue for the three months ended in Feb. 2014 was $4,390 Mil. Therefore, ConAgra Foods Inc's Gross Margin for the quarter that ended in Feb. 2014 was 22.22%.

ConAgra Foods Inc had a gross margin of 22.22% for the quarter that ended in Feb. 2014 => Competition eroding margins

During the past 13 years, the highest Gross Margin of ConAgra Foods Inc was 25.57%. The lowest was 13.13%. And the median was 21.04%.

Warning Sign:

ConAgra Foods, Inc. gross margin has been in long term decline. The average rate of decline per year is -1.1%.


Definition

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

ConAgra Foods Inc's Gross Profit for the fiscal year that ended in May. 2013 is calculated as

Gross Profit (A: May. 2013 )=Revenue - Cost of Goods Sold
=15491.4 - 11931.4
=3,560

ConAgra Foods Inc's Gross Profit for the quarter that ended in Feb. 2014 is calculated as

Gross Profit (Q: Feb. 2014 )=Revenue - Cost of Goods Sold
=4389.7 - 3414.5
=975

ConAgra Foods Inc Gross Profit for the trailing twelve months (TTM) ended in Feb. 2014 was 958.9 (May. 2013 ) + 830.9 (Aug. 2013 ) + 1014.7 (Nov. 2013 ) + 975.2 (Feb. 2014 ) = $3,780 Mil.

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

ConAgra Foods Inc's Gross Margin for the quarter that ended in Feb. 2014 is calculated as

Gross Margin (Q: Feb. 2014 )=Gross Profit (Q: Feb. 2014 ) / Revenue (Q: Feb. 2014 )
=(Revenue - Cost of Goods Sold) / Revenue
=975 / 4389.7
=22.22 %

* 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

ConAgra Foods Inc had a gross margin of 22.22% for the quarter that ended in Feb. 2014 => Competition eroding margins


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.

ConAgra Foods Inc Annual Data

May04May05May06May07May08May09May10May11May12May13
Gross_Profit 2,7902,8342,5412,6932,7142,7823,0612,9032,8133,560

ConAgra Foods Inc Quarterly Data

Nov11Feb12May12Aug12Nov12Feb13May13Aug13Nov13Feb14
Gross_Profit 7547876768698628719598311,015975
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