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Group 1 Automotive Inc (NYSE:GPI)
Gross Profit
$1,496 Mil (TTM As of Jun. 2015)

Group 1 Automotive Inc's gross profit for the three months ended in Jun. 2015 was $392 Mil. Group 1 Automotive Inc's gross profit for the trailing twelve months (TTM) ended in Jun. 2015 was $1,496 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Group 1 Automotive Inc's gross profit for the three months ended in Jun. 2015 was $392 Mil. Group 1 Automotive Inc's revenue for the three months ended in Jun. 2015 was $2,726 Mil. Therefore, Group 1 Automotive Inc's Gross Margin for the quarter that ended in Jun. 2015 was 14.36%.

Group 1 Automotive Inc had a gross margin of 14.36% for the quarter that ended in Jun. 2015 => No sustainable competitive advantage

During the past 13 years, the highest Gross Margin of Group 1 Automotive Inc was 17.14%. The lowest was 13.51%. And the median was 15.39%.

Warning Sign:

Group 1 Automotive Inc gross margin has been in long term decline. The average rate of decline per year is -3.2%.


Definition

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

Group 1 Automotive 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
=9937.889 - 8489.951
=1,448

Group 1 Automotive Inc's Gross Profit for the quarter that ended in Jun. 2015 is calculated as

Gross Profit (Q: Jun. 2015 )=Revenue - Cost of Goods Sold
=2726.48 - 2334.907
=392

Group 1 Automotive Inc Gross Profit for the trailing twelve months (TTM) ended in Jun. 2015 was 374.709 (Sep. 2014 ) + 365.959 (Dec. 2014 ) + 363.884 (Mar. 2015 ) + 391.573 (Jun. 2015 ) = $1,496 Mil.

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

Group 1 Automotive Inc's Gross Margin for the quarter that ended in Jun. 2015 is calculated as

Gross Margin (Q: Jun. 2015 )=Gross Profit (Q: Jun. 2015 ) / Revenue (Q: Jun. 2015 )
=(Revenue - Cost of Goods Sold) / Revenue
=392 / 2726.48
=14.36 %

* 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

Group 1 Automotive Inc had a gross margin of 14.36% for the quarter that ended in Jun. 2015 => 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.

Group 1 Automotive Inc Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
Gross_Profit 9329659969167768779611,1171,2931,448

Group 1 Automotive Inc Quarterly Data

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
Gross_Profit 300341329321338369375366364392
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