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CareFusion Corp (NYSE:CFN)
Gross Profit
$1,908 Mil (TTM As of Jun. 2014)

CareFusion Corp's gross profit for the three months ended in Jun. 2014 was $547 Mil. CareFusion Corp's gross profit for the trailing twelve months (TTM) ended in Jun. 2014 was $1,908 Mil.

Gross Margin is calculated as gross profit divided by its revenue. CareFusion Corp's gross profit for the three months ended in Jun. 2014 was $547 Mil. CareFusion Corp's revenue for the three months ended in Jun. 2014 was $1,122 Mil. Therefore, CareFusion Corp's Gross Margin for the quarter that ended in Jun. 2014 was 48.75%.

CareFusion Corp had a gross margin of 48.75% for the quarter that ended in Jun. 2014 => Durable competitive advantage

During the past 8 years, the highest Gross Margin of CareFusion Corp was 52.11%. The lowest was 44.03%. And the median was 48.58%.


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 Jun. 2014 is calculated as

Gross Profit (Q: Jun. 2014 )=Revenue - Cost of Goods Sold
=1122 - 575
=547

CareFusion Corp Gross Profit for the trailing twelve months (TTM) ended in Jun. 2014 was 423 (Sep. 2013 ) + 466 (Dec. 2013 ) + 472 (Mar. 2014 ) + 547 (Jun. 2014 ) = $1,908 Mil.

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

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

Gross Margin (Q: Jun. 2014 )=Gross Profit (Q: Jun. 2014 ) / Revenue (Q: Jun. 2014 )
=(Revenue - Cost of Goods Sold) / Revenue
=547 / 1122
=48.75 %

* 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 48.75% for the quarter that ended in Jun. 2014 => 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.

CareFusion Corp Annual Data

Jun07Jun08Jun09Jun10Jun11Jun12Jun13Jun14
Gross_Profit 001,5672,0461,9821,8661,8051,8041,8501,908

CareFusion Corp Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
Gross_Profit 459480436471476467423466472547
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