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Dean Foods Company (NYSE:DF)
Gross Profit
$2,073 Mil (TTM As of Dec. 2013)

Dean Foods Company's gross profit for the three months ended in Dec. 2013 was $446 Mil. Dean Foods Company's gross profit for the trailing twelve months (TTM) ended in Dec. 2013 was $2,073 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Dean Foods Company's gross profit for the three months ended in Dec. 2013 was $446 Mil. Dean Foods Company's revenue for the three months ended in Dec. 2013 was $2,295 Mil. Therefore, Dean Foods Company's Gross Margin for the quarter that ended in Dec. 2013 was 19.42%.

Dean Foods Company had a gross margin of 19.42% for the quarter that ended in Dec. 2013 => No sustainable competitive advantage

During the past 13 years, the highest Gross Margin of Dean Foods Company was 27.94%. The lowest was 20.57%. And the median was 24.54%.

Warning Sign:

Dean Foods Company gross margin has been in long term decline. The average rate of decline per year is -3.9%.


Definition

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

Dean Foods Company'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
=9016.321 - 7161.734
=1,855

Dean Foods Company's Gross Profit for the quarter that ended in Dec. 2013 is calculated as

Gross Profit (Q: Dec. 2013 )=Revenue - Cost of Goods Sold
=2295.45 - 1849.68
=446

Dean Foods Company Gross Profit for the trailing twelve months (TTM) ended in Dec. 2013 was 713.776 (Mar. 2013 ) + 472.3 (Jun. 2013 ) + 441.285 (Sep. 2013 ) + 445.77 (Dec. 2013 ) = $2,073 Mil.

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

Dean Foods Company's Gross Margin for the quarter that ended in Dec. 2013 is calculated as

Gross Margin (Q: Dec. 2013 )=Gross Profit (Q: Dec. 2013 ) / Revenue (Q: Dec. 2013 )
=(Revenue - Cost of Goods Sold) / Revenue
=446 / 2295.45
=19.42 %

* 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

Dean Foods Company had a gross margin of 19.42% for the quarter that ended in Dec. 2013 => 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.

Dean Foods Company Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Gross_Profit 2,3872,5832,7402,7382,9453,1053,0062,7802,0951,855

Dean Foods Company Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
Gross_Profit 741529724540508516714472441446
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