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Mitcham Industries Inc (NAS:MIND)
Gross Profit
$27.60 Mil (TTM As of Jul. 2014)

Mitcham Industries Inc's gross profit for the three months ended in Jul. 2014 was $3.24 Mil. Mitcham Industries Inc's gross profit for the trailing twelve months (TTM) ended in Jul. 2014 was $27.60 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Mitcham Industries Inc's gross profit for the three months ended in Jul. 2014 was $3.24 Mil. Mitcham Industries Inc's revenue for the three months ended in Jul. 2014 was $19.55 Mil. Therefore, Mitcham Industries Inc's Gross Margin for the quarter that ended in Jul. 2014 was 16.56%.

Mitcham Industries Inc had a gross margin of 16.56% for the quarter that ended in Jul. 2014 => No sustainable competitive advantage

During the past 13 years, the highest Gross Margin of Mitcham Industries Inc was 82.19%. The lowest was 32.85%. And the median was 54.22%.

Warning Sign:

Mitcham Industries Inc gross margin has been in long term decline. The average rate of decline per year is -3.2%.


Definition

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

Mitcham Industries Inc's Gross Profit for the fiscal year that ended in Jan. 2014 is calculated as

Gross Profit (A: Jan. 2014 )=Revenue - Cost of Goods Sold
=92.108 - 60.093
=32.02

Mitcham Industries Inc's Gross Profit for the quarter that ended in Jul. 2014 is calculated as

Gross Profit (Q: Jul. 2014 )=Revenue - Cost of Goods Sold
=19.545 - 16.308
=3.24

Mitcham Industries Inc Gross Profit for the trailing twelve months (TTM) ended in Jul. 2014 was 4.953 (Oct. 2013 ) + 8.165 (Jan. 2014 ) + 11.243 (Apr. 2014 ) + 3.237 (Jul. 2014 ) = $27.60 Mil.

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

Mitcham Industries Inc's Gross Margin for the quarter that ended in Jul. 2014 is calculated as

Gross Margin (Q: Jul. 2014 )=Gross Profit (Q: Jul. 2014 ) / Revenue (Q: Jul. 2014 )
=(Revenue - Cost of Goods Sold) / Revenue
=3.24 / 19.545
=16.56 %

* 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

Mitcham Industries Inc had a gross margin of 16.56% for the quarter that ended in Jul. 2014 => No sustainable 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.

Mitcham Industries Inc Annual Data

Jan05Jan06Jan07Jan08Jan09Jan10Jan11Jan12Jan13Jan14
Gross_Profit 20.1018.3423.0835.8132.6418.1326.6457.7537.4132.02

Mitcham Industries Inc Quarterly Data

Apr12Jul12Oct12Jan13Apr13Jul13Oct13Jan14Apr14Jul14
Gross_Profit 16.897.404.358.7714.604.304.958.1711.243.24
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