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Majesco Entertainment Company (NAS:COOL)
Gross Profit
$8.41 Mil (TTM As of Jan. 2014)

Majesco Entertainment Company's gross profit for the three months ended in Jan. 2014 was $3.39 Mil. Majesco Entertainment Company's gross profit for the trailing twelve months (TTM) ended in Jan. 2014 was $8.41 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Majesco Entertainment Company's gross profit for the three months ended in Jan. 2014 was $3.39 Mil. Majesco Entertainment Company's revenue for the three months ended in Jan. 2014 was $21.93 Mil. Therefore, Majesco Entertainment Company's Gross Margin for the quarter that ended in Jan. 2014 was 15.45%.

Majesco Entertainment Company had a gross margin of 15.45% for the quarter that ended in Jan. 2014 => No sustainable competitive advantage

During the past 13 years, the highest Gross Margin of Majesco Entertainment Company was 100.00%. The lowest was -2.32%. And the median was 32.89%.

Warning Sign:

Majesco Entertainment Company gross margin has been in long term decline. The average rate of decline per year is -1.1%.


Definition

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

Majesco Entertainment Company's Gross Profit for the fiscal year that ended in Oct. 2013 is calculated as

Gross Profit (A: Oct. 2013 )=Revenue - Cost of Goods Sold
=47.267 - 35.099
=12.17

Majesco Entertainment Company's Gross Profit for the quarter that ended in Jan. 2014 is calculated as

Gross Profit (Q: Jan. 2014 )=Revenue - Cost of Goods Sold
=21.934 - 18.545
=3.39

Majesco Entertainment Company Gross Profit for the trailing twelve months (TTM) ended in Jan. 2014 was 3.035 (Apr. 2013 ) + 1.235 (Jul. 2013 ) + 0.746 (Oct. 2013 ) + 3.389 (Jan. 2014 ) = $8.41 Mil.

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

Majesco Entertainment Company's Gross Margin for the quarter that ended in Jan. 2014 is calculated as

Gross Margin (Q: Jan. 2014 )=Gross Profit (Q: Jan. 2014 ) / Revenue (Q: Jan. 2014 )
=(Revenue - Cost of Goods Sold) / Revenue
=3.39 / 21.934
=15.45 %

* 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

Majesco Entertainment Company had a gross margin of 15.45% for the quarter that ended in Jan. 2014 => No sustainable 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.

Majesco Entertainment Company Annual Data

Oct04Oct05Oct06Oct07Oct08Oct09Oct10Oct11Oct12Oct13
Gross_Profit 34.74-1.3919.8317.2923.0922.9118.3945.4843.5212.17

Majesco Entertainment Company Quarterly Data

Oct11Jan12Apr12Jul12Oct12Jan13Apr13Jul13Oct13Jan14
Gross_Profit 4.2423.0112.173.524.817.153.041.240.753.39
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