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Group 1 Automotive Inc (NYSE:GPI)
Gross Profit
$1,358 Mil (TTM As of Jun. 2014)

Group 1 Automotive Inc's gross profit for the three months ended in Jun. 2014 was $369 Mil. Group 1 Automotive Inc's gross profit for the trailing twelve months (TTM) ended in Jun. 2014 was $1,358 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. 2014 was $369 Mil. Group 1 Automotive Inc's revenue for the three months ended in Jun. 2014 was $2,512 Mil. Therefore, Group 1 Automotive Inc's Gross Margin for the quarter that ended in Jun. 2014 was 14.70%.

Group 1 Automotive Inc had a gross margin of 14.70% for the quarter that ended in Jun. 2014 => 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 15.48%.

Warning Sign:

Group 1 Automotive Inc gross margin has been in long term decline. The average rate of decline per year is -2.8%.


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. 2013 is calculated as

Gross Profit (A: Dec. 2013 )=Revenue - Cost of Goods Sold
=8918.581 - 7626.035
=1,293

Group 1 Automotive Inc's Gross Profit for the quarter that ended in Jun. 2014 is calculated as

Gross Profit (Q: Jun. 2014 )=Revenue - Cost of Goods Sold
=2511.638 - 2142.49
=369

Group 1 Automotive Inc Gross Profit for the trailing twelve months (TTM) ended in Jun. 2014 was 329.462 (Sep. 2013 ) + 321.321 (Dec. 2013 ) + 338.122 (Mar. 2014 ) + 369.148 (Jun. 2014 ) = $1,358 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. 2014 is calculated as

Gross Margin (Q: Jun. 2014 )=Gross Profit (Q: Jun. 2014 ) / Revenue (Q: Jun. 2014 )
=(Revenue - Cost of Goods Sold) / Revenue
=369 / 2511.638
=14.70 %

* 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 14.70% for the quarter that ended in Jun. 2014 => 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

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Gross_Profit 8329329659969167768779611,1171,293

Group 1 Automotive Inc Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
Gross_Profit 285291280300341329321338369375
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