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GuruFocus has detected 5 Warning Signs with Statoil ASA \$FRA:DNQA.
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Statoil ASA (FRA:DNQA)
Gross Profit
€13,922 Mil (TTM As of Dec. 2016)

Statoil ASA's gross profit for the three months ended in Dec. 2016 was €3,817 Mil. Statoil ASA's gross profit for the trailing twelve months (TTM) ended in Dec. 2016 was €13,922 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Statoil ASA's gross profit for the three months ended in Dec. 2016 was €3,817 Mil. Statoil ASA's revenue for the three months ended in Dec. 2016 was €12,092 Mil. Therefore, Statoil ASA's Gross Margin for the quarter that ended in Dec. 2016 was 31.57%.

Statoil ASA had a gross margin of 31.57% for the quarter that ended in Dec. 2016 => Competition eroding margins

During the past 13 years, the highest Gross Margin of Statoil ASA was 55.76%. The lowest was 33.45%. And the median was 48.80%.

Warning Sign:

Statoil ASA gross margin has been in long term decline. The average rate of decline per year is -8.2%.

Definition

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

Statoil ASA'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 = 43485.6384491 - 28941.1318608 = 14,545

Statoil ASA's Gross Profit for the quarter that ended in Dec. 2016 is calculated as

 Gross Profit (Q: Dec. 2016 ) = Revenue - Cost of Goods Sold = 12092.1414352 - 8274.71798275 = 3,817

Statoil ASA Gross Profit for the trailing twelve months (TTM) ended in Dec. 2016 was 3320.76149425 (Mar. 2016 ) + 3225.34709861 (Jun. 2016 ) + 3558.76325403 (Sep. 2016 ) + 3817.42345246 (Dec. 2016 ) = €13,922 Mil.

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

Statoil ASA'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 = 3,817 / 12092.1414352 = 31.57 %

* 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

Statoil ASA had a gross margin of 31.57% for the quarter that ended in Dec. 2016 => Competition eroding margins

Related Terms

Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Statoil ASA Annual Data

 Dec07 Dec08 Dec09 Dec10 Dec11 Dec12 Dec13 Dec14 Dec15 Dec16 Gross_Profit 31,755 34,683 30,718 35,041 44,552 48,589 30,428 32,139 21,001 14,545

Statoil ASA Quarterly Data

 Sep14 Dec14 Mar15 Jun15 Sep15 Dec15 Mar16 Jun16 Sep16 Dec16 Gross_Profit 6,597 8,541 5,543 6,578 4,117 4,474 3,321 3,225 3,559 3,817
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