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National Financial Partners Corporation (NYSE:NFP)
Gross Profit
$750 Mil (TTM As of Mar. 2013)

National Financial Partners Corporation's gross profit for the three months ended in Mar. 2013 was $182 Mil. National Financial Partners Corporation's gross profit for the trailing twelve months (TTM) ended in Mar. 2013 was $750 Mil.

Gross Margin is calculated as gross profit divided by its revenue. National Financial Partners Corporation's gross profit for the three months ended in Mar. 2013 was $182 Mil. National Financial Partners Corporation's revenue for the three months ended in Mar. 2013 was $263 Mil. Therefore, National Financial Partners Corporation's Gross Margin for the quarter that ended in Mar. 2013 was 69.25%.

National Financial Partners Corporation had a gross margin of 69.25% for the quarter that ended in Mar. 2013 => Durable competitive advantage


Definition

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

National Financial Partners Corporation's Gross Profit for the fiscal year that ended in Dec. 2012 is calculated as

Gross Profit (A: Dec. 2012 )=Revenue - Cost of Goods Sold
=1061.738 - 322.33
=739

National Financial Partners Corporation's Gross Profit for the quarter that ended in Mar. 2013 is calculated as

Gross Profit (Q: Mar. 2013 )=Revenue - Cost of Goods Sold
=263.471 - 81.014
=182

National Financial Partners Corporation Gross Profit for the trailing twelve months (TTM) ended in Mar. 2013 was 176.463 (Jun. 2012 ) + 175.867 (Sep. 2012 ) + 215.097 (Dec. 2012 ) + 182.457 (Mar. 2013 ) = $750 Mil.

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

National Financial Partners Corporation's Gross Margin for the quarter that ended in Mar. 2013 is calculated as

Gross Margin (Q: Mar. 2013 )=Gross Profit (Q: Mar. 2013 ) / Revenue (Q: Mar. 2013 )
=(Revenue - Cost of Goods Sold) / Revenue
=182 / 263.471
=69.25 %

* 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

National Financial Partners Corporation had a gross margin of 69.25% for the quarter that ended in Mar. 2013 => 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.

National Financial Partners Corporation Annual Data

Dec03Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12
Gross_Profit 108140175199224208170678683739

National Financial Partners Corporation Quarterly Data

Dec10Mar11Jun11Sep11Dec11Mar12Jun12Sep12Dec12Mar13
Gross_Profit 193154163171195172176176215182
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