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Motorola Solutions Inc (NYSE:MSI)
Gross Profit
$2,778 Mil (TTM As of Sep. 2016)

Motorola Solutions Inc's gross profit for the three months ended in Sep. 2016 was $762 Mil. Motorola Solutions Inc's gross profit for the trailing twelve months (TTM) ended in Sep. 2016 was $2,778 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Motorola Solutions Inc's gross profit for the three months ended in Sep. 2016 was $762 Mil. Motorola Solutions Inc's revenue for the three months ended in Sep. 2016 was $1,532 Mil. Therefore, Motorola Solutions Inc's Gross Margin for the quarter that ended in Sep. 2016 was 49.74%.

Motorola Solutions Inc had a gross margin of 49.74% for the quarter that ended in Sep. 2016 => Durable competitive advantage

During the past 13 years, the highest Gross Margin of Motorola Solutions Inc was 50.95%. The lowest was 27.17%. And the median was 47.94%.

Warning Sign:

Motorola Solutions Inc gross margin has been in long term decline. The average rate of decline per year is -1.1%.


Definition

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

Motorola Solutions Inc's Gross Profit for the fiscal year that ended in Dec. 2015 is calculated as

Gross Profit (A: Dec. 2015 )=Revenue - Cost of Goods Sold
=5695 - 2976
=2,719

Motorola Solutions Inc's Gross Profit for the quarter that ended in Sep. 2016 is calculated as

Gross Profit (Q: Sep. 2016 )=Revenue - Cost of Goods Sold
=1532 - 770
=762

Motorola Solutions Inc Gross Profit for the trailing twelve months (TTM) ended in Sep. 2016 was 838 (Dec. 2015 ) + 502 (Mar. 2016 ) + 676 (Jun. 2016 ) + 762 (Sep. 2016 ) = $2,778 Mil.

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

Motorola Solutions Inc'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
=762 / 1532
=49.74 %

* 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

Motorola Solutions Inc had a gross margin of 49.74% for the quarter that ended in Sep. 2016 => 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 local exchange's currency.

Motorola Solutions Inc Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
Gross_Profit 12,7279,9528,3955,7413,8124,1463,1943,1092,8312,719

Motorola Solutions Inc Quarterly Data

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
Gross_Profit 656685912548648685838502676762
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