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Starwood Hotels & Resorts Worldwide Inc (NYSE:HOT)
Gross Profit
$4,262 Mil (TTM As of Mar. 2015)

Starwood Hotels & Resorts Worldwide Inc's gross profit for the three months ended in Mar. 2015 was $1,016 Mil. Starwood Hotels & Resorts Worldwide Inc's gross profit for the trailing twelve months (TTM) ended in Mar. 2015 was $4,262 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 Mar. 2015 was $1,016 Mil. Starwood Hotels & Resorts Worldwide Inc's revenue for the three months ended in Mar. 2015 was $1,415 Mil. Therefore, Starwood Hotels & Resorts Worldwide Inc's Gross Margin for the quarter that ended in Mar. 2015 was 71.80%.

Starwood Hotels & Resorts Worldwide Inc had a gross margin of 71.80% for the quarter that ended in Mar. 2015 => Durable competitive advantage

During the past 13 years, the highest Gross Margin of Starwood Hotels & Resorts Worldwide Inc was 71.45%. The lowest was 21.89%. And the median was 27.35%.


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. 2014 is calculated as

Gross Profit (A: Dec. 2014 )=Revenue - Cost of Goods Sold
=5983 - 1708
=4,275

Starwood Hotels & Resorts Worldwide Inc's Gross Profit for the quarter that ended in Mar. 2015 is calculated as

Gross Profit (Q: Mar. 2015 )=Revenue - Cost of Goods Sold
=1415 - 399
=1,016

Starwood Hotels & Resorts Worldwide Inc Gross Profit for the trailing twelve months (TTM) ended in Mar. 2015 was 1100 (Jun. 2014 ) + 1064 (Sep. 2014 ) + 1082 (Dec. 2014 ) + 1016 (Mar. 2015 ) = $4,262 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 Mar. 2015 is calculated as

Gross Margin (Q: Mar. 2015 )=Gross Profit (Q: Mar. 2015 ) / Revenue (Q: Mar. 2015 )
=(Revenue - Cost of Goods Sold) / Revenue
=1,016 / 1415
=71.80 %

* 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 71.80% for the quarter that ended in Mar. 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.

Starwood Hotels & Resorts Worldwide Inc Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
Gross_Profit 01,6351,7251,4411,0281,1541,3153,9694,1914,275

Starwood Hotels & Resorts Worldwide Inc Quarterly Data

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
Gross_Profit 1,0281,0201,0711,0491,0511,0291,1001,0641,0821,016
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