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H&R Block Inc (NYSE:HRB)
Gross Profit
$1,426 Mil (TTM As of Oct. 2015)

H&R Block Inc's gross profit for the three months ended in Oct. 2015 was $-98 Mil. H&R Block Inc's gross profit for the trailing twelve months (TTM) ended in Oct. 2015 was $1,426 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 Oct. 2015 was $-98 Mil. H&R Block Inc's revenue for the three months ended in Oct. 2015 was $128 Mil. Therefore, H&R Block Inc's Gross Margin for the quarter that ended in Oct. 2015 was -76.30%.

H&R Block Inc had a gross margin of -76.30% for the quarter that ended in Oct. 2015 => No sustainable competitive advantage

During the past 13 years, the highest Gross Margin of H&R Block Inc was 48.01%. The lowest was 36.30%. And the median was 39.82%.


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. 2015 is calculated as

Gross Profit (A: Apr. 2015 )=Revenue - Cost of Goods Sold
=3078.658 - 1630.49
=1,448

H&R Block Inc's Gross Profit for the quarter that ended in Oct. 2015 is calculated as

Gross Profit (Q: Oct. 2015 )=Revenue - Cost of Goods Sold
=128.415 - 226.401
=-98

H&R Block Inc Gross Profit for the trailing twelve months (TTM) ended in Oct. 2015 was 114.396 (Jan. 2015 ) + 1484.981 (Apr. 2015 ) + -75.79 (Jul. 2015 ) + -97.986 (Oct. 2015 ) = $1,426 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 Oct. 2015 is calculated as

Gross Margin (Q: Oct. 2015 )=Gross Profit (Q: Oct. 2015 ) / Revenue (Q: Oct. 2015 )
=(Revenue - Cost of Goods Sold) / Revenue
=-98 / 128.415
=-76.30 %

* 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 -76.30% for the quarter that ended in Oct. 2015 => 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

Apr06Apr07Apr08Apr09Apr10Apr11Apr12Apr13Apr14Apr15
Gross_Profit 1,4291,5131,4981,4871,4061,1681,1921,3011,4521,448

H&R Block Inc Quarterly Data

Jul13Oct13Jan14Apr14Jul14Oct14Jan15Apr15Jul15Oct15
Gross_Profit -83-73-1501,744-64-871141,485-76-98
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