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Energy Company of Minas Gerais (NYSE:CIG)
Gross Profit
$2,653 Mil (TTM As of Jun. 2014)

Energy Company of Minas Gerais's gross profit for the three months ended in Jun. 2014 was $679 Mil. Energy Company of Minas Gerais's gross profit for the trailing twelve months (TTM) ended in Jun. 2014 was $2,653 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Energy Company of Minas Gerais's gross profit for the three months ended in Jun. 2014 was $679 Mil. Energy Company of Minas Gerais's revenue for the three months ended in Jun. 2014 was $2,130 Mil. Therefore, Energy Company of Minas Gerais's Gross Margin for the quarter that ended in Jun. 2014 was 31.89%.

Energy Company of Minas Gerais had a gross margin of 31.89% for the quarter that ended in Jun. 2014 => Competition eroding margins

During the past 13 years, the highest Gross Margin of Energy Company of Minas Gerais was 80.63%. The lowest was 31.42%. And the median was 60.08%.

Warning Sign:

Energy Company of Minas Gerais gross margin has been in long term decline. The average rate of decline per year is -11.1%.


Definition

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

Energy Company of Minas Gerais'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
=6130.34367142 - 4127.40989103
=2,003

Energy Company of Minas Gerais's Gross Profit for the quarter that ended in Jun. 2014 is calculated as

Gross Profit (Q: Jun. 2014 )=Revenue - Cost of Goods Sold
=2130.2868705 - 1450.90917266
=679

Energy Company of Minas Gerais Gross Profit for the trailing twelve months (TTM) ended in Jun. 2014 was 415.904936015 (Sep. 2013 ) + 673.093042749 (Dec. 2013 ) + 884.430810569 (Mar. 2014 ) + 679.377697842 (Jun. 2014 ) = $2,653 Mil.

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

Energy Company of Minas Gerais'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
=679 / 2130.2868705
=31.89 %

* 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

Energy Company of Minas Gerais had a gross margin of 31.89% for the quarter that ended in Jun. 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.

Energy Company of Minas Gerais Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Gross_Profit 1,9792,6723,1493,7943,8872,6732,8603,2202,1902,003

Energy Company of Minas Gerais Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
Gross_Profit 2,037527489677675405416673884679
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