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Home Inns & Hotels Management Inc (NAS:HMIN)
Gross Profit
$165.9 Mil (TTM As of Jun. 2014)

Home Inns & Hotels Management Inc's gross profit for the three months ended in Jun. 2014 was $51.6 Mil. Home Inns & Hotels Management Inc's gross profit for the trailing twelve months (TTM) ended in Jun. 2014 was $165.9 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Home Inns & Hotels Management Inc's gross profit for the three months ended in Jun. 2014 was $51.6 Mil. Home Inns & Hotels Management Inc's revenue for the three months ended in Jun. 2014 was $257.2 Mil. Therefore, Home Inns & Hotels Management Inc's Gross Margin for the quarter that ended in Jun. 2014 was 20.07%.

Home Inns & Hotels Management Inc had a gross margin of 20.07% for the quarter that ended in Jun. 2014 => Competition eroding margins

During the past 12 years, the highest Gross Margin of Home Inns & Hotels Management Inc was 51.98%. The lowest was 14.30%. And the median was 21.14%.


Definition

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

Home Inns & Hotels Management 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
=985.151214675 - 804.321764998
=180.8

Home Inns & Hotels Management 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
=257.181994192 - 205.555017748
=51.6

Home Inns & Hotels Management Inc Gross Profit for the trailing twelve months (TTM) ended in Jun. 2014 was 55.1397673275 (Sep. 2013 ) + 38.5602379772 (Dec. 2013 ) + 20.5524497992 (Mar. 2014 ) + 51.626976444 (Jun. 2014 ) = $165.9 Mil.

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

Home Inns & Hotels Management 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
=51.6 / 257.181994192
=20.07 %

* 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

Home Inns & Hotels Management Inc had a gross margin of 20.07% for the quarter that ended in Jun. 2014 => Competition eroding margins


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.

Home Inns & Hotels Management Inc Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Gross_Profit 5.716.519.431.238.366.3114.8107.3124.4180.8

Home Inns & Hotels Management Inc Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
Gross_Profit 13.032.238.722.815.244.555.138.620.651.6
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