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Starwood Hotels & Resorts Worldwide Inc (NYSE:HOT)
Gross Profit
$2,150 Mil (TTM As of Jun. 2016)

Starwood Hotels & Resorts Worldwide Inc's gross profit for the three months ended in Jun. 2016 was $1,030 Mil. Starwood Hotels & Resorts Worldwide Inc's gross profit for the trailing twelve months (TTM) ended in Jun. 2016 was $2,150 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 Jun. 2016 was $1,030 Mil. Starwood Hotels & Resorts Worldwide Inc's revenue for the three months ended in Jun. 2016 was $1,246 Mil. Therefore, Starwood Hotels & Resorts Worldwide Inc's Gross Margin for the quarter that ended in Jun. 2016 was 82.66%.

Starwood Hotels & Resorts Worldwide Inc had a gross margin of 82.66% for the quarter that ended in Jun. 2016 => Durable competitive advantage

During the past 13 years, the highest Gross Margin of Starwood Hotels & Resorts Worldwide Inc was 28.04%. The lowest was 21.89%. And the median was 25.42%.


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. 2015 is calculated as

Gross Profit (A: Dec. 2015 )=Revenue - Cost of Goods Sold
=5763 - 4255
=1,508

Starwood Hotels & Resorts Worldwide Inc's Gross Profit for the quarter that ended in Jun. 2016 is calculated as

Gross Profit (Q: Jun. 2016 )=Revenue - Cost of Goods Sold
=1246 - 216
=1,030

Starwood Hotels & Resorts Worldwide Inc Gross Profit for the trailing twelve months (TTM) ended in Jun. 2016 was 380 (Sep. 2015 ) + 393 (Dec. 2015 ) + 347 (Mar. 2016 ) + 1030 (Jun. 2016 ) = $2,150 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 Jun. 2016 is calculated as

Gross Margin (Q: Jun. 2016 )=Gross Profit (Q: Jun. 2016 ) / Revenue (Q: Jun. 2016 )
=(Revenue - Cost of Goods Sold) / Revenue
=1,030 / 1246
=82.66 %

* 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 82.66% for the quarter that ended in Jun. 2016 => 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

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
Gross_Profit 1,6351,7251,4411,0281,1541,3151,5211,5771,5641,508

Starwood Hotels & Resorts Worldwide Inc Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
Gross_Profit 3574063784233449923803933471,030
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