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CareFusion Corp (NYSE:CFN)
Gross Profit
\$2,011 Mil (TTM As of Dec. 2014)

CareFusion Corp's gross profit for the three months ended in Dec. 2014 was \$535 Mil. CareFusion Corp's gross profit for the trailing twelve months (TTM) ended in Dec. 2014 was \$2,011 Mil.

Gross Margin is calculated as gross profit divided by its revenue. CareFusion Corp's gross profit for the three months ended in Dec. 2014 was \$535 Mil. CareFusion Corp's revenue for the three months ended in Dec. 2014 was \$1,069 Mil. Therefore, CareFusion Corp's Gross Margin for the quarter that ended in Dec. 2014 was 50.05%.

CareFusion Corp had a gross margin of 50.05% for the quarter that ended in Dec. 2014 => Durable competitive advantage

Definition

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

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

 Gross Profit (A: Jun. 2014 ) = Revenue - Cost of Goods Sold = 3842 - 1934 = 1,908

CareFusion Corp's Gross Profit for the quarter that ended in Dec. 2014 is calculated as

 Gross Profit (Q: Dec. 2014 ) = Revenue - Cost of Goods Sold = 1069 - 534 = 535

CareFusion Corp Gross Profit for the trailing twelve months (TTM) ended in Dec. 2014 was 472 (Mar. 2014 ) + 547 (Jun. 2014 ) + 457 (Sep. 2014 ) + 535 (Dec. 2014 ) = \$2,011 Mil.

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

CareFusion Corp's Gross Margin for the quarter that ended in Dec. 2014 is calculated as

 Gross Margin (Q: Dec. 2014 ) = Gross Profit (Q: Dec. 2014 ) / Revenue (Q: Dec. 2014 ) = (Revenue - Cost of Goods Sold) / Revenue = 535 / 1069 = 50.05 %

* 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

CareFusion Corp had a gross margin of 50.05% for the quarter that ended in Dec. 2014 => Durable 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.

CareFusion Corp Annual Data

 Jun07 Jun08 Jun09 Jun10 Jun11 Jun12 Jun13 Jun14 Gross_Profit 0 0 1,567 2,046 1,731 1,691 1,768 1,804 1,850 1,908

CareFusion Corp Quarterly Data

 Sep12 Dec12 Mar13 Jun13 Sep13 Dec13 Mar14 Jun14 Sep14 Dec14 Gross_Profit 436 471 476 467 423 466 472 547 457 535
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