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NGL Energy Partners LP (NYSE:NGL)
Gross Profit
$567 Mil (TTM As of Mar. 2014)

NGL Energy Partners LP's gross profit for the three months ended in Mar. 2014 was $211 Mil. NGL Energy Partners LP's gross profit for the trailing twelve months (TTM) ended in Mar. 2014 was $567 Mil.

Gross Margin is calculated as gross profit divided by its revenue. NGL Energy Partners LP's gross profit for the three months ended in Mar. 2014 was $211 Mil. NGL Energy Partners LP's revenue for the three months ended in Mar. 2014 was $3,976 Mil. Therefore, NGL Energy Partners LP's Gross Margin for the quarter that ended in Mar. 2014 was 5.31%.

NGL Energy Partners LP had a gross margin of 5.31% for the quarter that ended in Mar. 2014 => No sustainable competitive advantage

During the past 5 years, the highest Gross Margin of NGL Energy Partners LP was 8.57%. The lowest was 3.89%. And the median was 7.10%.


Definition

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

NGL Energy Partners LP's Gross Profit for the fiscal year that ended in Mar. 2014 is calculated as

Gross Profit (A: Mar. 2014 )=Revenue - Cost of Goods Sold
=9699.274 - 9132.699
=567

NGL Energy Partners LP's Gross Profit for the quarter that ended in Mar. 2014 is calculated as

Gross Profit (Q: Mar. 2014 )=Revenue - Cost of Goods Sold
=3975.935 - 3764.744
=211

NGL Energy Partners LP Gross Profit for the trailing twelve months (TTM) ended in Mar. 2014 was 82.881 (Jun. 2013 ) + 105.087 (Sep. 2013 ) + 167.416 (Dec. 2013 ) + 211.191 (Mar. 2014 ) = $567 Mil.

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

NGL Energy Partners LP's Gross Margin for the quarter that ended in Mar. 2014 is calculated as

Gross Margin (Q: Mar. 2014 )=Gross Profit (Q: Mar. 2014 ) / Revenue (Q: Mar. 2014 )
=(Revenue - Cost of Goods Sold) / Revenue
=211 / 3975.935
=5.31 %

* 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

NGL Energy Partners LP had a gross margin of 5.31% for the quarter that ended in Mar. 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.

NGL Energy Partners LP Annual Data

Mar09Mar10Mar12Mar13Mar14
Gross_Profit 00000295793379567

NGL Energy Partners LP Quarterly Data

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
Gross_Profit 3149278213413683105167211
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