Switch to:
Diageo PLC (NYSE:DEO)
Gross Profit
$9,662 Mil (TTM As of Jun. 2015)

Diageo PLC's gross profit for the six months ended in Jun. 2015 was $4,254 Mil. Diageo PLC's gross profit for the trailing twelve months (TTM) ended in Jun. 2015 was $9,662 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Diageo PLC's gross profit for the six months ended in Jun. 2015 was $4,254 Mil. Diageo PLC's revenue for the six months ended in Jun. 2015 was $7,653 Mil. Therefore, Diageo PLC's Gross Margin for the quarter that ended in Jun. 2015 was 55.59%.

Diageo PLC had a gross margin of 55.59% for the quarter that ended in Jun. 2015 => Durable competitive advantage

During the past 13 years, the highest Gross Margin of Diageo PLC was 70.13%. The lowest was 28.59%. And the median was 59.71%.


Definition

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

Diageo PLC's Gross Profit for the fiscal year that ended in Jun. 2015 is calculated as

Gross Profit (A: Jun. 2015 )=Revenue - Cost of Goods Sold
=16842.6791277 - 7180.68535826
=9,662

Diageo PLC's Gross Profit for the quarter that ended in Jun. 2015 is calculated as

Gross Profit (Q: Jun. 2015 )=Revenue - Cost of Goods Sold
=7652.64797508 - 3398.75389408
=4,254

For company reported semi-annually, GuruFocus uses latest annual data as the TTM data. Diageo PLC Gross Profit for the trailing twelve months (TTM) ended in Jun. 2015 was $9,662 Mil.

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

Diageo PLC's Gross Margin for the quarter that ended in Jun. 2015 is calculated as

Gross Margin (Q: Jun. 2015 )=Gross Profit (Q: Jun. 2015 ) / Revenue (Q: Jun. 2015 )
=(Revenue - Cost of Goods Sold) / Revenue
=4,254 / 7652.64797508
=55.59 %

* 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

Diageo PLC had a gross margin of 55.59% for the quarter that ended in Jun. 2015 => 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 own currency.

Diageo PLC Annual Data

Jun06Jun07Jun08Jun09Jun10Jun11Jun12Jun13Jun14Jun15
Gross_Profit 8,0098,8999,5358,8848,3919,60510,11410,77910,5409,662

Diageo PLC Semi-Annual Data

Dec10Jun11Dec11Jun12Dec12Jun13Dec13Jun14Dec14Jun15
Gross_Profit 5,0674,3405,5664,5656,0164,8966,1084,2255,4334,254
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)

GuruFocus Premium Plus Membership

FEEDBACK