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Meredith Corp (NYSE:MDP)
Gross Profit
$902 Mil (TTM As of Jun. 2014)

Meredith Corp's gross profit for the three months ended in Jun. 2014 was $242 Mil. Meredith Corp's gross profit for the trailing twelve months (TTM) ended in Jun. 2014 was $902 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Meredith Corp's gross profit for the three months ended in Jun. 2014 was $242 Mil. Meredith Corp's revenue for the three months ended in Jun. 2014 was $391 Mil. Therefore, Meredith Corp's Gross Margin for the quarter that ended in Jun. 2014 was 61.80%.

Meredith Corp had a gross margin of 61.80% for the quarter that ended in Jun. 2014 => Durable competitive advantage

During the past 13 years, the highest Gross Margin of Meredith Corp was 62.45%. The lowest was 54.10%. And the median was 58.82%.


Definition

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

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

Gross Profit (A: Jun. 2014 )=Revenue - Cost of Goods Sold
=1468.708 - 567.024
=902

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

Gross Profit (Q: Jun. 2014 )=Revenue - Cost of Goods Sold
=390.794 - 149.265
=242

Meredith Corp Gross Profit for the trailing twelve months (TTM) ended in Jun. 2014 was 215.675 (Sep. 2013 ) + 221.832 (Dec. 2013 ) + 222.648 (Mar. 2014 ) + 241.529 (Jun. 2014 ) = $902 Mil.

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

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

Gross Margin (Q: Jun. 2014 )=Gross Profit (Q: Jun. 2014 ) / Revenue (Q: Jun. 2014 )
=(Revenue - Cost of Goods Sold) / Revenue
=242 / 390.794
=61.80 %

* 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

Meredith Corp had a gross margin of 61.80% for the quarter that ended in Jun. 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.

Meredith Corp Annual Data

Jun05Jun06Jun07Jun08Jun09Jun10Jun11Jun12Jun13Jun14
Gross_Profit 694905954879762811846829910902

Meredith Corp Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
Gross_Profit 209229214226228242216222223242
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