Switch to:
W W Grainger Inc (NYSE:GWW)
Gross Profit
$4,314 Mil (TTM As of Dec. 2014)

W W Grainger Inc's gross profit for the three months ended in Dec. 2014 was $1,055 Mil. W W Grainger Inc's gross profit for the trailing twelve months (TTM) ended in Dec. 2014 was $4,314 Mil.

Gross Margin is calculated as gross profit divided by its revenue. W W Grainger Inc's gross profit for the three months ended in Dec. 2014 was $1,055 Mil. W W Grainger Inc's revenue for the three months ended in Dec. 2014 was $2,511 Mil. Therefore, W W Grainger Inc's Gross Margin for the quarter that ended in Dec. 2014 was 42.01%.

W W Grainger Inc had a gross margin of 42.01% for the quarter that ended in Dec. 2014 => Durable competitive advantage

During the past 13 years, the highest Gross Margin of W W Grainger Inc was 43.83%. The lowest was 33.43%. And the median was 38.66%.


Definition

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

W W Grainger 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
=9964.953 - 5650.711
=4,314

W W Grainger Inc's Gross Profit for the quarter that ended in Dec. 2014 is calculated as

Gross Profit (Q: Dec. 2014 )=Revenue - Cost of Goods Sold
=2510.959 - 1456.158
=1,055

W W Grainger Inc Gross Profit for the trailing twelve months (TTM) ended in Dec. 2014 was 1075.971 (Mar. 2014 ) + 1080.686 (Jun. 2014 ) + 1102.784 (Sep. 2014 ) + 1054.801 (Dec. 2014 ) = $4,314 Mil.

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

W W Grainger Inc's Gross Margin for the quarter that ended in Dec. 2014 is calculated as

Gross Margin (Q: Dec. 2014 )=Gross Profit (Q: Dec. 2014 ) / Revenue (Q: Dec. 2014 )
=(Revenue - Cost of Goods Sold) / Revenue
=1,055 / 2510.959
=42.01 %

* 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

W W Grainger Inc had a gross margin of 42.01% for the quarter that ended in Dec. 2014 => Durable 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.

W W Grainger Inc Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
Gross_Profit 2,1622,3542,6042,8082,5993,0063,5113,9164,1364,314

W W Grainger Inc Quarterly Data

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
Gross_Profit 9949701,0321,0471,0511,0061,0761,0811,1031,055
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Free 7-day Trial
FEEDBACK