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GuruFocus has detected 4 Warning Signs with Coca-Cola Femsa SAB de CV \$KOF.
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Coca-Cola Femsa SAB de CV (NYSE:KOF)
Gross Profit
\$4,148 Mil (TTM As of Dec. 2016)

Coca-Cola Femsa SAB de CV's gross profit for the three months ended in Dec. 2016 was \$1,219 Mil. Coca-Cola Femsa SAB de CV's gross profit for the trailing twelve months (TTM) ended in Dec. 2016 was \$4,148 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Coca-Cola Femsa SAB de CV's gross profit for the three months ended in Dec. 2016 was \$1,219 Mil. Coca-Cola Femsa SAB de CV's revenue for the three months ended in Dec. 2016 was \$2,785 Mil. Therefore, Coca-Cola Femsa SAB de CV's Gross Margin for the quarter that ended in Dec. 2016 was 43.76%.

Coca-Cola Femsa SAB de CV had a gross margin of 43.76% for the quarter that ended in Dec. 2016 => Durable competitive advantage

During the past 13 years, the highest Gross Margin of Coca-Cola Femsa SAB de CV was 48.19%. The lowest was 44.82%. And the median was 46.49%.

Definition

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

Coca-Cola Femsa SAB de CV'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 = 8669.50905401 - 4783.4061817 = 3,886

Coca-Cola Femsa SAB de CV's Gross Profit for the quarter that ended in Dec. 2016 is calculated as

 Gross Profit (Q: Dec. 2016 ) = Revenue - Cost of Goods Sold = 2784.98673119 - 1566.20746175 = 1,219

Coca-Cola Femsa SAB de CV Gross Profit for the trailing twelve months (TTM) ended in Dec. 2016 was 959.427803271 (Mar. 2016 ) + 988.752961863 (Jun. 2016 ) + 980.949510487 (Sep. 2016 ) + 1218.77926943 (Dec. 2016 ) = \$4,148 Mil.

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

Coca-Cola Femsa SAB de CV'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 = 1,219 / 2784.98673119 = 43.76 %

* 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 Femsa SAB de CV had a gross margin of 43.76% 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 Femsa SAB de CV Annual Data

 Dec07 Dec08 Dec09 Dec10 Dec11 Dec12 Dec13 Dec14 Dec15 Dec16 Gross_Profit 3,077 2,913 3,717 3,868 4,104 5,335 5,606 4,709 4,220 3,886

Coca-Cola Femsa SAB de CV Quarterly Data

 Sep14 Dec14 Mar15 Jun15 Sep15 Dec15 Mar16 Jun16 Sep16 Dec16 Gross_Profit 1,480 740 1,034 1,130 1,065 1,194 959 989 981 1,219
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