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GuruFocus has detected 7 Warning Signs with Matthews International Corp \$MATW.
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Matthews International Corp (NAS:MATW)
Gross Profit
\$556 Mil (TTM As of Sep. 2016)

Matthews International Corp's gross profit for the three months ended in Sep. 2016 was \$147 Mil. Matthews International Corp's gross profit for the trailing twelve months (TTM) ended in Sep. 2016 was \$556 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Matthews International Corp's gross profit for the three months ended in Sep. 2016 was \$147 Mil. Matthews International Corp's revenue for the three months ended in Sep. 2016 was \$377 Mil. Therefore, Matthews International Corp's Gross Margin for the quarter that ended in Sep. 2016 was 38.95%.

Matthews International Corp had a gross margin of 38.95% for the quarter that ended in Sep. 2016 => Competition eroding margins

During the past 13 years, the highest Gross Margin of Matthews International Corp was 39.45%. The lowest was 35.47%. And the median was 37.51%.

Definition

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

Matthews International Corp's Gross Profit for the fiscal year that ended in Sep. 2016 is calculated as

 Gross Profit (A: Sep. 2016 ) = Revenue - Cost of Goods Sold = 1480.464 - 924.01 = 556

Matthews International Corp's Gross Profit for the quarter that ended in Sep. 2016 is calculated as

 Gross Profit (Q: Sep. 2016 ) = Revenue - Cost of Goods Sold = 376.995 - 230.165 = 147

Matthews International Corp Gross Profit for the trailing twelve months (TTM) ended in Sep. 2016 was 126.567 (Dec. 2015 ) + 137.76 (Mar. 2016 ) + 145.297 (Jun. 2016 ) + 146.83 (Sep. 2016 ) = \$556 Mil.

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

Matthews International Corp's Gross Margin for the quarter that ended in Sep. 2016 is calculated as

 Gross Margin (Q: Sep. 2016 ) = Gross Profit (Q: Sep. 2016 ) / Revenue (Q: Sep. 2016 ) = (Revenue - Cost of Goods Sold) / Revenue = 147 / 376.995 = 38.95 %

* 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

Matthews International Corp had a gross margin of 38.95% for the quarter that ended in Sep. 2016 => Competition eroding margins

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.

Matthews International Corp Annual Data

 Sep07 Sep08 Sep09 Sep10 Sep11 Sep12 Sep13 Sep14 Sep15 Sep16 Gross_Profit 280 323 295 323 352 337 357 392 529 556

Matthews International Corp Quarterly Data

 Jun14 Sep14 Dec14 Mar15 Jun15 Sep15 Dec15 Mar16 Jun16 Sep16 Gross_Profit 104 117 125 128 135 142 127 138 145 147
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