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Cheung Kong Holdings Ltd (OTCPK:CHEUY)
Gross Profit
$1,740 Mil (TTM As of Jun. 2014)

Cheung Kong Holdings Ltd's gross profit for the six months ended in Jun. 2014 was $906 Mil. Cheung Kong Holdings Ltd's gross profit for the trailing twelve months (TTM) ended in Jun. 2014 was $1,740 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Cheung Kong Holdings Ltd's gross profit for the six months ended in Jun. 2014 was $906 Mil. Cheung Kong Holdings Ltd's revenue for the six months ended in Jun. 2014 was $1,645 Mil. Therefore, Cheung Kong Holdings Ltd's Gross Margin for the quarter that ended in Jun. 2014 was 55.04%.

Cheung Kong Holdings Ltd had a gross margin of 55.04% for the quarter that ended in Jun. 2014 => Durable competitive advantage

During the past 13 years, the highest Gross Margin of Cheung Kong Holdings Ltd was 73.15%. The lowest was 24.63%. And the median was 48.29%.


Definition

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

Cheung Kong Holdings Ltd's Gross Profit for the fiscal year that ended in Dec. 2013 is calculated as

Gross Profit (A: Dec. 2013 )=Revenue - Cost of Goods Sold
=2768.75483372 - 1029.00232019
=1,740

Cheung Kong Holdings Ltd's Gross Profit for the quarter that ended in Jun. 2014 is calculated as

Gross Profit (Q: Jun. 2014 )=Revenue - Cost of Goods Sold
=1645.16129032 - 739.612903226
=906

For company reported semi-annually, GuruFocus uses latest annual data as the TTM data. Cheung Kong Holdings Ltd Gross Profit for the trailing twelve months (TTM) ended in Jun. 2014 was $1,740 Mil.

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

Cheung Kong Holdings Ltd'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
=906 / 1645.16129032
=55.04 %

* 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

Cheung Kong Holdings Ltd had a gross margin of 55.04% 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.

Cheung Kong Holdings Ltd Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Gross_Profit 54332694209409521,3081,7241,4921,740

Cheung Kong Holdings Ltd Semi-Annual Data

Dec09Jun10Dec10Jun11Dec11Jun12Dec12Jun13Dec13Jun14
Gross_Profit 1487835261,0626588386546551,085906
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