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Cenveo Inc (NYSE:CVO)
Gross Profit
$311 Mil (TTM As of Jun. 2014)

Cenveo Inc's gross profit for the three months ended in Jun. 2014 was $80 Mil. Cenveo Inc's gross profit for the trailing twelve months (TTM) ended in Jun. 2014 was $311 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Cenveo Inc's gross profit for the three months ended in Jun. 2014 was $80 Mil. Cenveo Inc's revenue for the three months ended in Jun. 2014 was $479 Mil. Therefore, Cenveo Inc's Gross Margin for the quarter that ended in Jun. 2014 was 16.68%.

Cenveo Inc had a gross margin of 16.68% for the quarter that ended in Jun. 2014 => No sustainable competitive advantage

During the past 13 years, the highest Gross Margin of Cenveo Inc was 25.05%. The lowest was 16.42%. And the median was 20.01%.

Warning Sign:

Cenveo Inc gross margin has been in long term decline. The average rate of decline per year is -3%.


Definition

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

Cenveo Inc'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
=1777.808 - 1485.931
=292

Cenveo Inc's Gross Profit for the quarter that ended in Jun. 2014 is calculated as

Gross Profit (Q: Jun. 2014 )=Revenue - Cost of Goods Sold
=479.41 - 399.436
=80

Cenveo Inc Gross Profit for the trailing twelve months (TTM) ended in Jun. 2014 was 75.425 (Sep. 2013 ) + 80.334 (Dec. 2013 ) + 74.962 (Mar. 2014 ) + 79.974 (Jun. 2014 ) = $311 Mil.

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

Cenveo Inc'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
=80 / 479.41
=16.68 %

* 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

Cenveo Inc had a gross margin of 16.68% for the quarter that ended in Jun. 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.

Cenveo Inc Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Gross_Profit 284275299418428320346363336292

Cenveo Inc Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
Gross_Profit 81828787676975807580
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