Switch to:
GuruFocus has detected 8 Warning Signs with Coca-Cola Co \$KO.
More than 500,000 people have already joined GuruFocus to track the stocks they follow and exchange investment ideas.
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

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

 Dec07 Dec08 Dec09 Dec10 Dec11 Dec12 Dec13 Dec14 Dec15 Dec16 Gross_Profit 18,451 20,570 19,902 22,426 28,327 28,964 28,433 28,109 26,812 25,398

Coca-Cola Co Quarterly Data

 Sep14 Dec14 Mar15 Jun15 Sep15 Dec15 Mar16 Jun16 Sep16 Dec16 Gross_Profit 7,346 6,515 6,608 7,408 6,850 5,946 6,213 7,068 6,502 5,615
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to \$400 per referral. ( Learn More)