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Genpact Ltd (NYSE:G)
Gross Profit
\$993 Mil (TTM As of Sep. 2016)

Genpact Ltd's gross profit for the three months ended in Sep. 2016 was \$256 Mil. Genpact Ltd's gross profit for the trailing twelve months (TTM) ended in Sep. 2016 was \$993 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Genpact Ltd's gross profit for the three months ended in Sep. 2016 was \$256 Mil. Genpact Ltd's revenue for the three months ended in Sep. 2016 was \$649 Mil. Therefore, Genpact Ltd's Gross Margin for the quarter that ended in Sep. 2016 was 39.51%.

Genpact Ltd had a gross margin of 39.51% for the quarter that ended in Sep. 2016 => Competition eroding margins

During the past 13 years, the highest Gross Margin of Genpact Ltd was 41.13%. The lowest was 37.21%. And the median was 39.22%.

Definition

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

Genpact Ltd's Gross Profit for the fiscal year that ended in Dec. 2015 is calculated as

 Gross Profit (A: Dec. 2015 ) = Revenue - Cost of Goods Sold = 2461.044 - 1493.547 = 967

Genpact Ltd's Gross Profit for the quarter that ended in Sep. 2016 is calculated as

 Gross Profit (Q: Sep. 2016 ) = Revenue - Cost of Goods Sold = 648.783 - 392.432 = 256

Genpact Ltd Gross Profit for the trailing twelve months (TTM) ended in Sep. 2016 was 252.591 (Dec. 2015 ) + 236.855 (Mar. 2016 ) + 246.768 (Jun. 2016 ) + 256.351 (Sep. 2016 ) = \$993 Mil.

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

Genpact Ltd's Gross Margin for the quarter that ended in Sep. 2016 is calculated as

 Gross Margin (Q: Sep. 2016 ) = Gross Profit (Q: Sep. 2016 ) / Revenue (Q: Sep. 2016 ) = (Revenue - Cost of Goods Sold) / Revenue = 256 / 648.783 = 39.51 %

* 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

Genpact Ltd had a gross margin of 39.51% for the quarter that ended in Sep. 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.

Genpact Ltd Annual Data

 Dec06 Dec07 Dec08 Dec09 Dec10 Dec11 Dec12 Dec13 Dec14 Dec15 Gross_Profit 252 307 422 447 470 596 744 812 901 967

Genpact Ltd Quarterly Data

 Jun14 Sep14 Dec14 Mar15 Jun15 Sep15 Dec15 Mar16 Jun16 Sep16 Gross_Profit 221 234 242 230 243 242 253 237 247 256
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