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Coca-Cola Co (NYSE:KO)
Gross Profit
$28,215 Mil (TTM As of Mar. 2014)

Coca-Cola Co's gross profit for the three months ended in Mar. 2014 was $6,493 Mil. Coca-Cola Co's gross profit for the trailing twelve months (TTM) ended in Mar. 2014 was $28,215 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Coca-Cola Co's gross profit for the three months ended in Mar. 2014 was $6,493 Mil. Coca-Cola Co's revenue for the three months ended in Mar. 2014 was $10,576 Mil. Therefore, Coca-Cola Co's Gross Margin for the quarter that ended in Mar. 2014 was 61.39%.

Coca-Cola Co had a gross margin of 61.39% for the quarter that ended in Mar. 2014 => Durable competitive advantage

During the past 13 years, the highest Gross Margin of Coca-Cola Co was 73.48%. The lowest was 60.32%. And the median was 64.53%.

Warning Sign:

Coca-Cola Co gross margin has been in long term decline. The average rate of decline per year is -1.5%.


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. 2013 is calculated as

Gross Profit (A: Dec. 2013 )=Revenue - Cost of Goods Sold
=46854 - 18421
=28,433

Coca-Cola Co's Gross Profit for the quarter that ended in Mar. 2014 is calculated as

Gross Profit (Q: Mar. 2014 )=Revenue - Cost of Goods Sold
=10576 - 4083
=6,493

Coca-Cola Co Gross Profit for the trailing twelve months (TTM) ended in Mar. 2014 was 7760 (Jun. 2013 ) + 7237 (Sep. 2013 ) + 6725 (Dec. 2013 ) + 6493 (Mar. 2014 ) = $28,215 Mil.

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

Coca-Cola Co's Gross Margin for the quarter that ended in Mar. 2014 is calculated as

Gross Margin (Q: Mar. 2014 )=Gross Profit (Q: Mar. 2014 ) / Revenue (Q: Mar. 2014 )
=(Revenue - Cost of Goods Sold) / Revenue
=6,493 / 10576
=61.39 %

* 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

Coca-Cola Co had a gross margin of 61.39% for the quarter that ended in Mar. 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.

Coca-Cola Co Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Gross_Profit 14,06814,90915,92418,45120,57019,90222,42628,32728,96428,433

Coca-Cola Co Quarterly Data

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
Gross_Profit 6,6376,7897,8617,4876,8276,7117,7607,2376,7256,493
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