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Hi-Tech Pharmacal Co., Inc. (NAS:HITK)
Gross Profit
\$116.0 Mil (TTM As of Jan. 2014)

Hi-Tech Pharmacal Co., Inc.'s gross profit for the three months ended in Jan. 2014 was \$31.9 Mil. Hi-Tech Pharmacal Co., Inc.'s gross profit for the trailing twelve months (TTM) ended in Jan. 2014 was \$116.0 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Hi-Tech Pharmacal Co., Inc.'s gross profit for the three months ended in Jan. 2014 was \$31.9 Mil. Hi-Tech Pharmacal Co., Inc.'s revenue for the three months ended in Jan. 2014 was \$59.9 Mil. Therefore, Hi-Tech Pharmacal Co., Inc.'s Gross Margin for the quarter that ended in Jan. 2014 was 53.32%.

Hi-Tech Pharmacal Co., Inc. had a gross margin of 53.32% for the quarter that ended in Jan. 2014 => Durable competitive advantage

Definition

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

Hi-Tech Pharmacal Co., Inc.'s Gross Profit for the fiscal year that ended in Apr. 2013 is calculated as

 Gross Profit (A: Apr. 2013 ) = Revenue - Cost of Goods Sold = 232.384 - 117.304 = 115.1

Hi-Tech Pharmacal Co., Inc.'s Gross Profit for the quarter that ended in Jan. 2014 is calculated as

 Gross Profit (Q: Jan. 2014 ) = Revenue - Cost of Goods Sold = 59.902 - 27.962 = 31.9

Hi-Tech Pharmacal Co., Inc. Gross Profit for the trailing twelve months (TTM) ended in Jan. 2014 was 27.291 (Apr. 2013 ) + 25.425 (Jul. 2013 ) + 31.31 (Oct. 2013 ) + 31.94 (Jan. 2014 ) = \$116.0 Mil.

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

Hi-Tech Pharmacal Co., Inc.'s Gross Margin for the quarter that ended in Jan. 2014 is calculated as

 Gross Margin (Q: Jan. 2014 ) = Gross Profit (Q: Jan. 2014 ) / Revenue (Q: Jan. 2014 ) = (Revenue - Cost of Goods Sold) / Revenue = 31.9 / 59.902 = 53.32 %

* 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

Hi-Tech Pharmacal Co., Inc. had a gross margin of 53.32% for the quarter that ended in Jan. 2014 => Durable competitive advantage

Related Terms

Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Hi-Tech Pharmacal Co., Inc. Annual Data

 Apr04 Apr05 Apr06 Apr07 Apr08 Apr09 Apr10 Apr11 Apr12 Apr13 Gross_Profit 30.2 36.3 42.2 23.2 21.5 51.7 90.8 107.6 129.2 115.1

Hi-Tech Pharmacal Co., Inc. Quarterly Data

 Oct11 Jan12 Apr12 Jul12 Oct12 Jan13 Apr13 Jul13 Oct13 Jan14 Gross_Profit 33.4 30.7 31.8 25.3 29.6 32.9 27.3 25.4 31.3 31.9
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