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H&R Block Inc (NYSE:HRB)
Gross Profit
$1,402 Mil (TTM As of Jul. 2014)

H&R Block Inc's gross profit for the three months ended in Jul. 2014 was $-78 Mil. H&R Block Inc's gross profit for the trailing twelve months (TTM) ended in Jul. 2014 was $1,402 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 Jul. 2014 was $-78 Mil. H&R Block Inc's revenue for the three months ended in Jul. 2014 was $134 Mil. Therefore, H&R Block Inc's Gross Margin for the quarter that ended in Jul. 2014 was -58.34%.

H&R Block Inc had a gross margin of -58.34% for the quarter that ended in Jul. 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 46.00%.


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 Jul. 2014 is calculated as

Gross Profit (Q: Jul. 2014 )=Revenue - Cost of Goods Sold
=133.586 - 211.521
=-78

H&R Block Inc Gross Profit for the trailing twelve months (TTM) ended in Jul. 2014 was -86.524 (Oct. 2013 ) + -163.767 (Jan. 2014 ) + 1729.788 (Apr. 2014 ) + -77.935 (Jul. 2014 ) = $1,402 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 Jul. 2014 is calculated as

Gross Margin (Q: Jul. 2014 )=Gross Profit (Q: Jul. 2014 ) / Revenue (Q: Jul. 2014 )
=(Revenue - Cost of Goods Sold) / Revenue
=-78 / 133.586
=-58.34 %

* 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 -58.34% for the quarter that ended in Jul. 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

Apr05Apr06Apr07Apr08Apr09Apr10Apr11Apr12Apr13Apr14
Gross_Profit 1,2061,4291,5131,4981,4871,4061,1681,1921,3011,397

H&R Block Inc Quarterly Data

Apr12Jul12Oct12Jan13Apr13Jul13Oct13Jan14Apr14Jul14
Gross_Profit 1,194-97-75941,378-83-87-1641,730-78
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