Switch to:
Cerner Corp (NAS:CERN)
Gross Profit
$3,214 Mil (TTM As of Jun. 2015)

Cerner Corp's gross profit for the three months ended in Jun. 2015 was $934 Mil. Cerner Corp's gross profit for the trailing twelve months (TTM) ended in Jun. 2015 was $3,214 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Cerner Corp's gross profit for the three months ended in Jun. 2015 was $934 Mil. Cerner Corp's revenue for the three months ended in Jun. 2015 was $1,126 Mil. Therefore, Cerner Corp's Gross Margin for the quarter that ended in Jun. 2015 was 82.92%.

Cerner Corp had a gross margin of 82.92% for the quarter that ended in Jun. 2015 => Durable competitive advantage

During the past 13 years, the highest Gross Margin of Cerner Corp was 83.18%. The lowest was 23.69%. And the median was 77.62%.


Definition

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

Cerner Corp's Gross Profit for the fiscal year that ended in Dec. 2014 is calculated as

Gross Profit (A: Dec. 2014 )=Revenue - Cost of Goods Sold
=3402.703 - 604.377
=2,798

Cerner Corp's Gross Profit for the quarter that ended in Jun. 2015 is calculated as

Gross Profit (Q: Jun. 2015 )=Revenue - Cost of Goods Sold
=1125.997 - 192.322
=934

Cerner Corp Gross Profit for the trailing twelve months (TTM) ended in Jun. 2015 was 700.084 (Sep. 2014 ) + 753.187 (Dec. 2014 ) + 827.429 (Mar. 2015 ) + 933.675 (Jun. 2015 ) = $3,214 Mil.

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

Cerner Corp's Gross Margin for the quarter that ended in Jun. 2015 is calculated as

Gross Margin (Q: Jun. 2015 )=Gross Profit (Q: Jun. 2015 ) / Revenue (Q: Jun. 2015 )
=(Revenue - Cost of Goods Sold) / Revenue
=934 / 1125.997
=82.92 %

* 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

Cerner Corp had a gross margin of 82.92% for the quarter that ended in Jun. 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.

Cerner Corp Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
Gross_Profit 9061,0871,2401,3801,3911,5301,7612,0572,3962,798

Cerner Corp Quarterly Data

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
Gross_Profit 553582608653656689700753827934
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)

GuruFocus Premium Plus Membership

FEEDBACK