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H&R Block Inc (NYSE:HRB)
Gross Profit
$1,397 Mil (TTM As of Apr. 2014)

H&R Block Inc's gross profit for the three months ended in Apr. 2014 was $1,730 Mil. H&R Block Inc's gross profit for the trailing twelve months (TTM) ended in Apr. 2014 was $1,397 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 Apr. 2014 was $1,730 Mil. H&R Block Inc's revenue for the three months ended in Apr. 2014 was $2,563 Mil. Therefore, H&R Block Inc's Gross Margin for the quarter that ended in Apr. 2014 was 67.49%.

H&R Block Inc had a gross margin of 67.49% for the quarter that ended in Apr. 2014 => Durable competitive advantage

During the past 13 years, the highest Gross Margin of H&R Block Inc was 96.38%. The lowest was 36.03%. And the median was 65.55%.


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. 2014 is calculated as

Gross Profit (A: Apr. 2014 )=Revenue - Cost of Goods Sold
=3024.295 - 1627.656
=1,397

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

Gross Profit (Q: Apr. 2014 )=Revenue - Cost of Goods Sold
=2562.99 - 833.202
=1,730

H&R Block Inc Gross Profit for the trailing twelve months (TTM) ended in Apr. 2014 was -82.858 (Jul. 2013 ) + -86.524 (Oct. 2013 ) + -163.767 (Jan. 2014 ) + 1729.788 (Apr. 2014 ) = $1,397 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 Apr. 2014 is calculated as

Gross Margin (Q: Apr. 2014 )=Gross Profit (Q: Apr. 2014 ) / Revenue (Q: Apr. 2014 )
=(Revenue - Cost of Goods Sold) / Revenue
=1,730 / 2562.99
=67.49 %

* 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 67.49% for the quarter that ended in Apr. 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.

H&R Block Inc Annual Data

Apr05Apr06Apr07Apr08Apr09Apr10Apr11Apr12Apr13Apr14
Gross_Profit 2,0041,9661,5131,6011,4871,4061,3601,2841,3011,397

H&R Block Inc Quarterly Data

Jan12Apr12Jul12Oct12Jan13Apr13Jul13Oct13Jan14Apr14
Gross_Profit 2321,217-97-75941,378-83-87-1641,730
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