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Fortune Brands Home & Security Inc (NYSE:FBHS)
Gross Profit
$1,413 Mil (TTM As of Mar. 2015)

Fortune Brands Home & Security Inc's gross profit for the three months ended in Mar. 2015 was $317 Mil. Fortune Brands Home & Security Inc's gross profit for the trailing twelve months (TTM) ended in Mar. 2015 was $1,413 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Fortune Brands Home & Security Inc's gross profit for the three months ended in Mar. 2015 was $317 Mil. Fortune Brands Home & Security Inc's revenue for the three months ended in Mar. 2015 was $951 Mil. Therefore, Fortune Brands Home & Security Inc's Gross Margin for the quarter that ended in Mar. 2015 was 33.33%.

Fortune Brands Home & Security Inc had a gross margin of 33.33% for the quarter that ended in Mar. 2015 => Competition eroding margins

During the past 6 years, the highest Gross Margin of Fortune Brands Home & Security Inc was 34.97%. The lowest was 29.94%. And the median was 32.63%.


Definition

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

Fortune Brands Home & Security Inc's Gross Profit for the fiscal year that ended in Dec. 2014 is calculated as

Gross Profit (A: Dec. 2014 )=Revenue - Cost of Goods Sold
=4013.6 - 2646.7
=1,367

Fortune Brands Home & Security Inc's Gross Profit for the quarter that ended in Mar. 2015 is calculated as

Gross Profit (Q: Mar. 2015 )=Revenue - Cost of Goods Sold
=950.8 - 633.9
=317

Fortune Brands Home & Security Inc Gross Profit for the trailing twelve months (TTM) ended in Mar. 2015 was 400.4 (Jun. 2014 ) + 378.3 (Sep. 2014 ) + 317.1 (Dec. 2014 ) + 316.9 (Mar. 2015 ) = $1,413 Mil.

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

Fortune Brands Home & Security Inc's Gross Margin for the quarter that ended in Mar. 2015 is calculated as

Gross Margin (Q: Mar. 2015 )=Gross Profit (Q: Mar. 2015 ) / Revenue (Q: Mar. 2015 )
=(Revenue - Cost of Goods Sold) / Revenue
=317 / 950.8
=33.33 %

* 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

Fortune Brands Home & Security Inc had a gross margin of 33.33% for the quarter that ended in Mar. 2015 => Competition eroding margins


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.

Fortune Brands Home & Security Inc Annual Data

Dec09Dec10Dec11Dec12Dec13Dec14
Gross_Profit 00009031,0569971,1701,2951,367

Fortune Brands Home & Security Inc Quarterly Data

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
Gross_Profit 304300377359301295400378317317
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