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Novo Nordisk A/S (NYSE:NVO)
Gross Profit
$13,448 Mil (TTM As of Sep. 2015)

Novo Nordisk A/S's gross profit for the three months ended in Sep. 2015 was $3,453 Mil. Novo Nordisk A/S's gross profit for the trailing twelve months (TTM) ended in Sep. 2015 was $13,448 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 Sep. 2015 was $3,453 Mil. Novo Nordisk A/S's revenue for the three months ended in Sep. 2015 was $4,032 Mil. Therefore, Novo Nordisk A/S's Gross Margin for the quarter that ended in Sep. 2015 was 85.64%.

Novo Nordisk A/S had a gross margin of 85.64% for the quarter that ended in Sep. 2015 => Durable competitive advantage

During the past 13 years, the highest Gross Margin of Novo Nordisk A/S was 83.60%. The lowest was 72.81%. And the median was 80.17%.


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 Sep. 2015 is calculated as

Gross Profit (Q: Sep. 2015 )=Revenue - Cost of Goods Sold
=4032.08572246 - 578.957665508
=3,453

Novo Nordisk A/S Gross Profit for the trailing twelve months (TTM) ended in Sep. 2015 was 3411.0453845 (Dec. 2014 ) + 3092.78649534 (Mar. 2015 ) + 3490.8215468 (Jun. 2015 ) + 3453.12805695 (Sep. 2015 ) = $13,448 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 Sep. 2015 is calculated as

Gross Margin (Q: Sep. 2015 )=Gross Profit (Q: Sep. 2015 ) / Revenue (Q: Sep. 2015 )
=(Revenue - Cost of Goods Sold) / Revenue
=3,453 / 4032.08572246
=85.64 %

* 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 85.64% for the quarter that ended in Sep. 2015 => 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

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
Gross_Profit 5,1666,2616,4327,9598,7109,51111,35412,75912,30213,387

Novo Nordisk A/S Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
Gross_Profit 3,0443,3623,1273,2733,2593,4113,0933,4913,4530
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