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LKQ Corp (NAS:LKQ)
Gross Profit
$2,652 Mil (TTM As of Dec. 2014)

LKQ Corp's gross profit for the three months ended in Dec. 2014 was $665 Mil. LKQ Corp's gross profit for the trailing twelve months (TTM) ended in Dec. 2014 was $2,652 Mil.

Gross Margin is calculated as gross profit divided by its revenue. LKQ Corp's gross profit for the three months ended in Dec. 2014 was $665 Mil. LKQ Corp's revenue for the three months ended in Dec. 2014 was $1,684 Mil. Therefore, LKQ Corp's Gross Margin for the quarter that ended in Dec. 2014 was 39.46%.

LKQ Corp had a gross margin of 39.46% for the quarter that ended in Dec. 2014 => Competition eroding margins

During the past 13 years, the highest Gross Margin of LKQ Corp was 47.28%. The lowest was 39.35%. And the median was 45.29%.

Warning Sign:

LKQ Corp gross margin has been in long term decline. The average rate of decline per year is -2.7%.


Definition

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

LKQ Corp's Gross Profit for the fiscal year that ended in Dec. 2014 is calculated as

Gross Profit (A: Dec. 2014 )=Revenue - Cost of Goods Sold
=6740.064 - 4088.151
=2,652

LKQ Corp's Gross Profit for the quarter that ended in Dec. 2014 is calculated as

Gross Profit (Q: Dec. 2014 )=Revenue - Cost of Goods Sold
=1684.131 - 1019.572
=665

LKQ Corp Gross Profit for the trailing twelve months (TTM) ended in Dec. 2014 was 651.884 (Mar. 2014 ) + 671.059 (Jun. 2014 ) + 664.411 (Sep. 2014 ) + 664.559 (Dec. 2014 ) = $2,652 Mil.

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

LKQ Corp's Gross Margin for the quarter that ended in Dec. 2014 is calculated as

Gross Margin (Q: Dec. 2014 )=Gross Profit (Q: Dec. 2014 ) / Revenue (Q: Dec. 2014 )
=(Revenue - Cost of Goods Sold) / Revenue
=665 / 1684.131
=39.46 %

* 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

LKQ Corp had a gross margin of 39.46% for the quarter that ended in Dec. 2014 => Competition eroding margins


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.

LKQ Corp Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
Gross_Profit 2583585068449281,0931,3921,7242,0752,652

LKQ Corp Quarterly Data

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
Gross_Profit 410445502510518546652671664665
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