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Harley-Davidson Inc (NYSE:HOG)
Gross Profit
$2,462 Mil (TTM As of Sep. 2015)

Harley-Davidson Inc's gross profit for the three months ended in Sep. 2015 was $530 Mil. Harley-Davidson Inc's gross profit for the trailing twelve months (TTM) ended in Sep. 2015 was $2,462 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Harley-Davidson Inc's gross profit for the three months ended in Sep. 2015 was $530 Mil. Harley-Davidson Inc's revenue for the three months ended in Sep. 2015 was $1,317 Mil. Therefore, Harley-Davidson Inc's Gross Margin for the quarter that ended in Sep. 2015 was 40.22%.

Harley-Davidson Inc had a gross margin of 40.22% for the quarter that ended in Sep. 2015 => Durable competitive advantage

During the past 13 years, the highest Gross Margin of Harley-Davidson Inc was 40.48%. The lowest was 33.40%. And the median was 38.35%.


Definition

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

Harley-Davidson 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
=6228.508 - 3707.077
=2,521

Harley-Davidson Inc's Gross Profit for the quarter that ended in Sep. 2015 is calculated as

Gross Profit (Q: Sep. 2015 )=Revenue - Cost of Goods Sold
=1317.43 - 787.496
=530

Harley-Davidson Inc Gross Profit for the trailing twelve months (TTM) ended in Sep. 2015 was 438.48 (Dec. 2014 ) + 714.114 (Mar. 2015 ) + 779.635 (Jun. 2015 ) + 529.934 (Sep. 2015 ) = $2,462 Mil.

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

Harley-Davidson Inc's Gross Margin for the quarter that ended in Sep. 2015 is calculated as

Gross Margin (Q: Sep. 2015 )=Gross Profit (Q: Sep. 2015 ) / Revenue (Q: Sep. 2015 )
=(Revenue - Cost of Goods Sold) / Revenue
=530 / 1317.43
=40.22 %

* 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

Harley-Davidson Inc had a gross margin of 40.22% for the quarter that ended in Sep. 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.

Harley-Davidson Inc Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
Gross_Profit 2,2332,1142,3081,5971,8381,9762,1622,3382,5212,233

Harley-Davidson Inc Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
Gross_Profit 540444708850526438714780530382
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