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Harley-Davidson Inc (NYSE:HOG)
Gross Profit
$2,458 Mil (TTM As of Jun. 2015)

Harley-Davidson Inc's gross profit for the three months ended in Jun. 2015 was $780 Mil. Harley-Davidson Inc's gross profit for the trailing twelve months (TTM) ended in Jun. 2015 was $2,458 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Harley-Davidson Inc's gross profit for the three months ended in Jun. 2015 was $780 Mil. Harley-Davidson Inc's revenue for the three months ended in Jun. 2015 was $1,824 Mil. Therefore, Harley-Davidson Inc's Gross Margin for the quarter that ended in Jun. 2015 was 42.73%.

Harley-Davidson Inc had a gross margin of 42.73% for the quarter that ended in Jun. 2015 => Durable competitive advantage

During the past 13 years, the highest Gross Margin of Harley-Davidson Inc was 40.48%. The lowest was 32.74%. And the median was 37.76%.


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 Jun. 2015 is calculated as

Gross Profit (Q: Jun. 2015 )=Revenue - Cost of Goods Sold
=1824.392 - 1044.757
=780

Harley-Davidson Inc Gross Profit for the trailing twelve months (TTM) ended in Jun. 2015 was 525.505 (Sep. 2014 ) + 438.48 (Dec. 2014 ) + 714.114 (Mar. 2015 ) + 779.635 (Jun. 2015 ) = $2,458 Mil.

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

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

Gross Margin (Q: Jun. 2015 )=Gross Profit (Q: Jun. 2015 ) / Revenue (Q: Jun. 2015 )
=(Revenue - Cost of Goods Sold) / Revenue
=780 / 1824.392
=42.73 %

* 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 42.73% for the quarter that ended in Jun. 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

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
Gross_Profit 2,0402,2332,1142,3081,8811,8381,9762,1622,3382,521

Harley-Davidson Inc Quarterly Data

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
Gross_Profit 636719540444708850526438714780
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