Switch to:
Novo Nordisk A/S (NYSE:NVO)
Gross Profit
$13,070 Mil (TTM As of Dec. 2014)

Novo Nordisk A/S's gross profit for the three months ended in Dec. 2014 was $3,411 Mil. Novo Nordisk A/S's gross profit for the trailing twelve months (TTM) ended in Dec. 2014 was $13,070 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Novo Nordisk A/S's gross profit for the three months ended in Dec. 2014 was $3,411 Mil. Novo Nordisk A/S's revenue for the three months ended in Dec. 2014 was $4,074 Mil. Therefore, Novo Nordisk A/S's Gross Margin for the quarter that ended in Dec. 2014 was 83.73%.

Novo Nordisk A/S had a gross margin of 83.73% for the quarter that ended in Dec. 2014 => Durable competitive advantage

During the past 13 years, the highest Gross Margin of Novo Nordisk A/S was 83.60%. The lowest was 71.98%. And the median was 76.51%.


Definition

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

Novo Nordisk A/S's Gross Profit for the fiscal year that ended in Dec. 2014 is calculated as

Gross Profit (A: Dec. 2014 )=Revenue - Cost of Goods Sold
=14714.9177313 - 2412.88462494
=12,302

Novo Nordisk A/S's Gross Profit for the quarter that ended in Dec. 2014 is calculated as

Gross Profit (Q: Dec. 2014 )=Revenue - Cost of Goods Sold
=4073.66903614 - 662.623651638
=3,411

Novo Nordisk A/S Gross Profit for the trailing twelve months (TTM) ended in Dec. 2014 was 3126.52834383 (Mar. 2014 ) + 3273.36359162 (Jun. 2014 ) + 3258.99890922 (Sep. 2014 ) + 3411.0453845 (Dec. 2014 ) = $13,070 Mil.

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

Novo Nordisk A/S's Gross Margin for the quarter that ended in Dec. 2014 is calculated as

Gross Margin (Q: Dec. 2014 )=Gross Profit (Q: Dec. 2014 ) / Revenue (Q: Dec. 2014 )
=(Revenue - Cost of Goods Sold) / Revenue
=3,411 / 4073.66903614
=83.73 %

* 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

Novo Nordisk A/S had a gross margin of 83.73% for the quarter that ended in Dec. 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.

Novo Nordisk A/S Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
Gross_Profit 3,9065,1666,2616,4327,9598,7109,51111,35412,75912,302

Novo Nordisk A/S Quarterly Data

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
Gross_Profit 2,8283,1322,8453,1453,0443,3623,1273,2733,2593,411
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
FEEDBACK