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Starwood Hotels & Resorts Worldwide Inc (NYSE:HOT)
Gross Profit
$4,244 Mil (TTM As of Sep. 2014)

Starwood Hotels & Resorts Worldwide Inc's gross profit for the three months ended in Sep. 2014 was $1,064 Mil. Starwood Hotels & Resorts Worldwide Inc's gross profit for the trailing twelve months (TTM) ended in Sep. 2014 was $4,244 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Starwood Hotels & Resorts Worldwide Inc's gross profit for the three months ended in Sep. 2014 was $1,064 Mil. Starwood Hotels & Resorts Worldwide Inc's revenue for the three months ended in Sep. 2014 was $1,493 Mil. Therefore, Starwood Hotels & Resorts Worldwide Inc's Gross Margin for the quarter that ended in Sep. 2014 was 71.27%.

Starwood Hotels & Resorts Worldwide Inc had a gross margin of 71.27% for the quarter that ended in Sep. 2014 => Durable competitive advantage

During the past 13 years, the highest Gross Margin of Starwood Hotels & Resorts Worldwide Inc was 68.54%. The lowest was 21.82%. And the median was 24.55%.


Definition

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

Starwood Hotels & Resorts Worldwide 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
=6115 - 1924
=4,191

Starwood Hotels & Resorts Worldwide Inc's Gross Profit for the quarter that ended in Sep. 2014 is calculated as

Gross Profit (Q: Sep. 2014 )=Revenue - Cost of Goods Sold
=1493 - 429
=1,064

Starwood Hotels & Resorts Worldwide Inc Gross Profit for the trailing twelve months (TTM) ended in Sep. 2014 was 1051 (Dec. 2013 ) + 1029 (Mar. 2014 ) + 1100 (Jun. 2014 ) + 1064 (Sep. 2014 ) = $4,244 Mil.

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

Starwood Hotels & Resorts Worldwide Inc's Gross Margin for the quarter that ended in Sep. 2014 is calculated as

Gross Margin (Q: Sep. 2014 )=Gross Profit (Q: Sep. 2014 ) / Revenue (Q: Sep. 2014 )
=(Revenue - Cost of Goods Sold) / Revenue
=1,064 / 1493
=71.27 %

* 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

Starwood Hotels & Resorts Worldwide Inc had a gross margin of 71.27% for the quarter that ended in Sep. 2014 => 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.

Starwood Hotels & Resorts Worldwide Inc Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Gross_Profit 001,6351,7251,4411,0281,1541,3151,5214,191

Starwood Hotels & Resorts Worldwide Inc Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
Gross_Profit 3903484083864031,0491,0511,0291,1001,064
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