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H&R Block Inc (NYSE:HRB)
Gross Profit
$1,045 Mil (TTM As of Jan. 2014)

H&R Block Inc's gross profit for the three months ended in Jan. 2014 was $-164 Mil. H&R Block Inc's gross profit for the trailing twelve months (TTM) ended in Jan. 2014 was $1,045 Mil.

Gross Margin is calculated as gross profit divided by its revenue. H&R Block Inc's gross profit for the three months ended in Jan. 2014 was $-164 Mil. H&R Block Inc's revenue for the three months ended in Jan. 2014 was $200 Mil. Therefore, H&R Block Inc's Gross Margin for the quarter that ended in Jan. 2014 was -81.98%.

H&R Block Inc had a gross margin of -81.98% for the quarter that ended in Jan. 2014 => No sustainable competitive advantage

During the past 13 years, the highest Gross Margin of H&R Block Inc was 95.24%. The lowest was 36.30%. And the median was 45.81%.


Definition

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

H&R Block Inc's Gross Profit for the fiscal year that ended in Apr. 2013 is calculated as

Gross Profit (A: Apr. 2013 )=Revenue - Cost of Goods Sold
=2905.943 - 1604.788
=1,301

H&R Block Inc's Gross Profit for the quarter that ended in Jan. 2014 is calculated as

Gross Profit (Q: Jan. 2014 )=Revenue - Cost of Goods Sold
=199.77 - 363.537
=-164

H&R Block Inc Gross Profit for the trailing twelve months (TTM) ended in Jan. 2014 was 1378.477 (Apr. 2013 ) + -82.858 (Jul. 2013 ) + -86.524 (Oct. 2013 ) + -163.767 (Jan. 2014 ) = $1,045 Mil.

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

H&R Block Inc's Gross Margin for the quarter that ended in Jan. 2014 is calculated as

Gross Margin (Q: Jan. 2014 )=Gross Profit (Q: Jan. 2014 ) / Revenue (Q: Jan. 2014 )
=(Revenue - Cost of Goods Sold) / Revenue
=-164 / 199.77
=-81.98 %

* 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

H&R Block Inc had a gross margin of -81.98% for the quarter that ended in Jan. 2014 => No sustainable 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.

H&R Block Inc Annual Data

Apr04Apr05Apr06Apr07Apr08Apr09Apr10Apr11Apr12Apr13
Gross_Profit 1,8411,2061,4291,5131,4981,4871,4061,1681,1921,301

H&R Block Inc Quarterly Data

Oct11Jan12Apr12Jul12Oct12Jan13Apr13Jul13Oct13Jan14
Gross_Profit -982081,194-97-75941,378-83-87-164
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