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Forest City Enterprises Inc (NYSE:FCE.A)
Gross Profit
$334 Mil (TTM As of Mar. 2014)

Forest City Enterprises Inc's gross profit for the three months ended in Mar. 2014 was $80 Mil. Forest City Enterprises Inc's gross profit for the trailing twelve months (TTM) ended in Mar. 2014 was $334 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Forest City Enterprises Inc's gross profit for the three months ended in Mar. 2014 was $80 Mil. Forest City Enterprises Inc's revenue for the three months ended in Mar. 2014 was $251 Mil. Therefore, Forest City Enterprises Inc's Gross Margin for the quarter that ended in Mar. 2014 was 31.88%.

Forest City Enterprises Inc had a gross margin of 31.88% for the quarter that ended in Mar. 2014 => Competition eroding margins

During the past 13 years, the highest Gross Margin of Forest City Enterprises Inc was 42.81%. The lowest was 37.41%. And the median was 39.06%.


Definition

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

Forest City Enterprises Inc's Gross Profit for the fiscal year that ended in Jan. 2013 is calculated as

Gross Profit (A: Jan. 2013 )=Revenue - Cost of Goods Sold
=1070.972 - 670.285
=401

Forest City Enterprises Inc's Gross Profit for the quarter that ended in Mar. 2014 is calculated as

Gross Profit (Q: Mar. 2014 )=Revenue - Cost of Goods Sold
=251.187 - 171.103
=80

Forest City Enterprises Inc Gross Profit for the trailing twelve months (TTM) ended in Mar. 2014 was 97.811 (Apr. 2013 ) + 100.358 (Jul. 2013 ) + 55.972 (Oct. 2013 ) + 80.084 (Mar. 2014 ) = $334 Mil.

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

Forest City Enterprises Inc's Gross Margin for the quarter that ended in Mar. 2014 is calculated as

Gross Margin (Q: Mar. 2014 )=Gross Profit (Q: Mar. 2014 ) / Revenue (Q: Mar. 2014 )
=(Revenue - Cost of Goods Sold) / Revenue
=80 / 251.187
=31.88 %

* 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

Forest City Enterprises Inc had a gross margin of 31.88% for the quarter that ended in Mar. 2014 => 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.

Forest City Enterprises Inc Annual Data

Jan04Jan05Jan06Jan07Jan08Jan09Jan10Jan11Jan12Jan13
Gross_Profit 0000503500527446397401

Forest City Enterprises Inc Quarterly Data

Jan12Apr12Jul12Oct12Jan13Mar13Apr13Jul13Oct13Mar14
Gross_Profit 76124789810586981005680
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