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W W Grainger Inc (NYSE:GWW)
Gross Profit
$4,332 Mil (TTM As of Mar. 2015)

W W Grainger Inc's gross profit for the three months ended in Mar. 2015 was $1,094 Mil. W W Grainger Inc's gross profit for the trailing twelve months (TTM) ended in Mar. 2015 was $4,332 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 Mar. 2015 was $1,094 Mil. W W Grainger Inc's revenue for the three months ended in Mar. 2015 was $2,440 Mil. Therefore, W W Grainger Inc's Gross Margin for the quarter that ended in Mar. 2015 was 44.83%.

W W Grainger Inc had a gross margin of 44.83% for the quarter that ended in Mar. 2015 => 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 Mar. 2015 is calculated as

Gross Profit (Q: Mar. 2015 )=Revenue - Cost of Goods Sold
=2439.661 - 1345.918
=1,094

W W Grainger Inc Gross Profit for the trailing twelve months (TTM) ended in Mar. 2015 was 1080.686 (Jun. 2014 ) + 1102.784 (Sep. 2014 ) + 1054.801 (Dec. 2014 ) + 1093.743 (Mar. 2015 ) = $4,332 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 Mar. 2015 is calculated as

Gross Margin (Q: Mar. 2015 )=Gross Profit (Q: Mar. 2015 ) / Revenue (Q: Mar. 2015 )
=(Revenue - Cost of Goods Sold) / Revenue
=1,094 / 2439.661
=44.83 %

* 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 44.83% for the quarter that ended in Mar. 2015 => 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

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
Gross_Profit 9701,0321,0471,0511,0061,0761,0811,1031,0551,094
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