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Coca-Cola Co (NYSE:KO)
Gross Profit
$25,398 Mil (TTM As of Dec. 2016)

Coca-Cola Co's gross profit for the three months ended in Dec. 2016 was $5,615 Mil. Coca-Cola Co's gross profit for the trailing twelve months (TTM) ended in Dec. 2016 was $25,398 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Coca-Cola Co's gross profit for the three months ended in Dec. 2016 was $5,615 Mil. Coca-Cola Co's revenue for the three months ended in Dec. 2016 was $9,409 Mil. Therefore, Coca-Cola Co's Gross Margin for the quarter that ended in Dec. 2016 was 59.68%.

Coca-Cola Co had a gross margin of 59.68% for the quarter that ended in Dec. 2016 => Durable competitive advantage

During the past 13 years, the highest Gross Margin of Coca-Cola Co was 64.39%. The lowest was 60.32%. And the median was 60.99%.


Definition

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

Coca-Cola Co's Gross Profit for the fiscal year that ended in Dec. 2016 is calculated as

Gross Profit (A: Dec. 2016 )=Revenue - Cost of Goods Sold
=41863 - 16465
=25,398

Coca-Cola Co's Gross Profit for the quarter that ended in Dec. 2016 is calculated as

Gross Profit (Q: Dec. 2016 )=Revenue - Cost of Goods Sold
=9409 - 3794
=5,615

Coca-Cola Co Gross Profit for the trailing twelve months (TTM) ended in Dec. 2016 was 6213 (Mar. 2016 ) + 7068 (Jun. 2016 ) + 6502 (Sep. 2016 ) + 5615 (Dec. 2016 ) = $25,398 Mil.

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

Coca-Cola Co's Gross Margin for the quarter that ended in Dec. 2016 is calculated as

Gross Margin (Q: Dec. 2016 )=Gross Profit (Q: Dec. 2016 ) / Revenue (Q: Dec. 2016 )
=(Revenue - Cost of Goods Sold) / Revenue
=5,615 / 9409
=59.68 %

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's 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

Coca-Cola Co had a gross margin of 59.68% for the quarter that ended in Dec. 2016 => 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 local exchange's currency.

Coca-Cola Co Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
Gross_Profit 18,45120,57019,90222,42628,32728,96428,43328,10926,81225,398

Coca-Cola Co Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
Gross_Profit 7,3466,5156,6087,4086,8505,9466,2137,0686,5025,615
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