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Nintendo Co Ltd (OTCPK:NTDOY)
Gross Profit
$1,559 Mil (TTM As of Jun. 2014)

Nintendo Co Ltd's gross profit for the three months ended in Jun. 2014 was $320 Mil. Nintendo Co Ltd's gross profit for the trailing twelve months (TTM) ended in Jun. 2014 was $1,559 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Nintendo Co Ltd's gross profit for the three months ended in Jun. 2014 was $320 Mil. Nintendo Co Ltd's revenue for the three months ended in Jun. 2014 was $734 Mil. Therefore, Nintendo Co Ltd's Gross Margin for the quarter that ended in Jun. 2014 was 43.55%.

Nintendo Co Ltd had a gross margin of 43.55% for the quarter that ended in Jun. 2014 => Durable competitive advantage

During the past 13 years, the highest Gross Margin of Nintendo Co Ltd was 43.16%. The lowest was 22.09%. And the median was 39.97%.

Warning Sign:

Nintendo Co Ltd gross margin has been in long term decline. The average rate of decline per year is -11.6%.


Definition

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

Nintendo Co Ltd'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
=5580.1011146 - 3987.05811162
=1,593

Nintendo Co Ltd's Gross Profit for the quarter that ended in Jun. 2014 is calculated as

Gross Profit (Q: Jun. 2014 )=Revenue - Cost of Goods Sold
=734.175348929 - 414.478081384
=320

Nintendo Co Ltd Gross Profit for the trailing twelve months (TTM) ended in Jun. 2014 was 262.227677202 (Sep. 2013 ) + 840.893977506 (Dec. 2013 ) + 135.909348221 (Mar. 2014 ) + 319.697267545 (Jun. 2014 ) = $1,559 Mil.

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

Nintendo Co Ltd'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
=320 / 734.175348929
=43.55 %

* 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

Nintendo Co Ltd had a gross margin of 43.55% 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.

Nintendo Co Ltd Annual Data

Mar05Mar06Mar07Mar08Mar09Mar10Mar11Mar12Mar13Mar14
Gross_Profit 2,0281,8373,3456,8188,0236,1554,6641,8911,4361,593

Nintendo Co Ltd Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
Gross_Profit 278315246931134365262841136320
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