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Cenovus Energy Inc (NYSE:CVE)
Gross Profit
$839 Mil (TTM As of Sep. 2016)

Cenovus Energy Inc's gross profit for the three months ended in Sep. 2016 was $340 Mil. Cenovus Energy Inc's gross profit for the trailing twelve months (TTM) ended in Sep. 2016 was $839 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Cenovus Energy Inc's gross profit for the three months ended in Sep. 2016 was $340 Mil. Cenovus Energy Inc's revenue for the three months ended in Sep. 2016 was $2,502 Mil. Therefore, Cenovus Energy Inc's Gross Margin for the quarter that ended in Sep. 2016 was 13.60%.

Cenovus Energy Inc had a gross margin of 13.60% for the quarter that ended in Sep. 2016 => No sustainable competitive advantage

During the past 8 years, the highest Gross Margin of Cenovus Energy Inc was 36.91%. The lowest was 9.50%. And the median was 23.25%.

Warning Sign:

Cenovus Energy Inc gross margin has been in long term decline. The average rate of decline per year is -7.1%.


Definition

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

Cenovus Energy Inc's Gross Profit for the fiscal year that ended in Dec. 2015 is calculated as

Gross Profit (A: Dec. 2015 )=Revenue - Cost of Goods Sold
=9631.00707358 - 8325.67636549
=1,305

Cenovus Energy Inc's Gross Profit for the quarter that ended in Sep. 2016 is calculated as

Gross Profit (Q: Sep. 2016 )=Revenue - Cost of Goods Sold
=2501.52578578 - 2161.27555691
=340

Cenovus Energy Inc Gross Profit for the trailing twelve months (TTM) ended in Sep. 2016 was 87.5082038941 (Dec. 2015 ) + -15.1217299259 (Mar. 2016 ) + 426.554986816 (Jun. 2016 ) + 340.250228868 (Sep. 2016 ) = $839 Mil.

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

Cenovus Energy Inc's Gross Margin for the quarter that ended in Sep. 2016 is calculated as

Gross Margin (Q: Sep. 2016 )=Gross Profit (Q: Sep. 2016 ) / Revenue (Q: Sep. 2016 )
=(Revenue - Cost of Goods Sold) / Revenue
=340 / 2501.52578578
=13.60 %

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's 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

Cenovus Energy Inc had a gross margin of 13.60% for the quarter that ended in Sep. 2016 => 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 local exchange's currency.

Cenovus Energy Inc Annual Data

Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
Gross_Profit 005,5484,0332,6843,7144,1594,1043,5721,305

Cenovus Energy Inc Quarterly Data

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
Gross_Profit 1,2481,04935631671828988-15427340
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