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GuruFocus has detected 6 Warning Signs with E.I. du Pont de Nemours & Co $DD.
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E.I. du Pont de Nemours & Co (NYSE:DD)
Gross Profit
$10,833 Mil (TTM As of Dec. 2016)

E.I. du Pont de Nemours & Co's gross profit for the three months ended in Dec. 2016 was $2,365 Mil. E.I. du Pont de Nemours & Co's gross profit for the trailing twelve months (TTM) ended in Dec. 2016 was $10,833 Mil.

Gross Margin is calculated as gross profit divided by its revenue. E.I. du Pont de Nemours & Co's gross profit for the three months ended in Dec. 2016 was $2,365 Mil. E.I. du Pont de Nemours & Co's revenue for the three months ended in Dec. 2016 was $5,512 Mil. Therefore, E.I. du Pont de Nemours & Co's Gross Margin for the quarter that ended in Dec. 2016 was 42.91%.

E.I. du Pont de Nemours & Co had a gross margin of 42.91% for the quarter that ended in Dec. 2016 => Durable competitive advantage

During the past 13 years, the highest Gross Margin of E.I. du Pont de Nemours & Co was 42.81%. The lowest was 25.98%. And the median was 38.81%.


Definition

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

E.I. du Pont de Nemours & Co's Gross Profit for the fiscal year that ended in Dec. 2016 is calculated as

Gross Profit (A: Dec. 2016 )=Revenue - Cost of Goods Sold
=25302 - 14469
=10,833

E.I. du Pont de Nemours & Co's Gross Profit for the quarter that ended in Dec. 2016 is calculated as

Gross Profit (Q: Dec. 2016 )=Revenue - Cost of Goods Sold
=5512 - 3147
=2,365

E.I. du Pont de Nemours & Co Gross Profit for the trailing twelve months (TTM) ended in Dec. 2016 was 3535 (Mar. 2016 ) + 3122 (Jun. 2016 ) + 1811 (Sep. 2016 ) + 2365 (Dec. 2016 ) = $10,833 Mil.

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

E.I. du Pont de Nemours & Co's Gross Margin for the quarter that ended in Dec. 2016 is calculated as

Gross Margin (Q: Dec. 2016 )=Gross Profit (Q: Dec. 2016 ) / Revenue (Q: Dec. 2016 )
=(Revenue - Cost of Goods Sold) / Revenue
=2,365 / 5512
=42.91 %

* 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

E.I. du Pont de Nemours & Co had a gross margin of 42.91% for the quarter that ended in Dec. 2016 => 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 local exchange's currency.

E.I. du Pont de Nemours & Co Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
Gross_Profit 7,6328,2887,6208,32513,15913,91011,72712,66010,71510,833

E.I. du Pont de Nemours & Co Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
Gross_Profit 2,5712,7043,5203,2731,8872,0353,5353,1221,8112,365
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