Switch to:
Novo Nordisk A/S (NYSE:NVO)
Gross Profit
$13,021 Mil (TTM As of Sep. 2014)

Novo Nordisk A/S's gross profit for the three months ended in Sep. 2014 was $3,259 Mil. Novo Nordisk A/S's gross profit for the trailing twelve months (TTM) ended in Sep. 2014 was $13,021 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. 2014 was $3,259 Mil. Novo Nordisk A/S's revenue for the three months ended in Sep. 2014 was $3,852 Mil. Therefore, Novo Nordisk A/S's Gross Margin for the quarter that ended in Sep. 2014 was 84.60%.

Novo Nordisk A/S had a gross margin of 84.60% for the quarter that ended in Sep. 2014 => Durable competitive advantage

During the past 13 years, the highest Gross Margin of Novo Nordisk A/S was 83.08%. The lowest was 71.64%. And the median was 75.85%.


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. 2013 is calculated as

Gross Profit (A: Dec. 2013 )=Revenue - Cost of Goods Sold
=15356.8540978 - 2598.30944506
=12,759

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

Gross Profit (Q: Sep. 2014 )=Revenue - Cost of Goods Sold
=3852.17376249 - 593.174853265
=3,259

Novo Nordisk A/S Gross Profit for the trailing twelve months (TTM) ended in Sep. 2014 was 3362.36677692 (Dec. 2013 ) + 3126.52834383 (Mar. 2014 ) + 3273.36359162 (Jun. 2014 ) + 3258.99890922 (Sep. 2014 ) = $13,021 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. 2014 is calculated as

Gross Margin (Q: Sep. 2014 )=Gross Profit (Q: Sep. 2014 ) / Revenue (Q: Sep. 2014 )
=(Revenue - Cost of Goods Sold) / Revenue
=3,259 / 3852.17376249
=84.60 %

* 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 84.60% for the quarter that ended in Sep. 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

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Gross_Profit 3,8103,9065,1666,2616,4327,9598,7109,51111,35412,759

Novo Nordisk A/S Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
Gross_Profit 2,7072,8283,1322,8453,1453,0443,3623,1273,2733,259
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)
Free 7-day Trial
FEEDBACK