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GuruFocus has detected 3 Warning Signs with Orbit International Corp \$ORBT.
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Orbit International Corp (OTCPK:ORBT)
Gross Profit
\$7.94 Mil (TTM As of Jun. 2016)

Orbit International Corp's gross profit for the three months ended in Jun. 2016 was \$1.65 Mil. Orbit International Corp's gross profit for the trailing twelve months (TTM) ended in Jun. 2016 was \$7.94 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Orbit International Corp's gross profit for the three months ended in Jun. 2016 was \$1.65 Mil. Orbit International Corp's revenue for the three months ended in Jun. 2016 was \$4.92 Mil. Therefore, Orbit International Corp's Gross Margin for the quarter that ended in Jun. 2016 was 33.60%.

Orbit International Corp had a gross margin of 33.60% for the quarter that ended in Jun. 2016 => Competition eroding margins

During the past 13 years, the highest Gross Margin of Orbit International Corp was 43.37%. The lowest was 34.50%. And the median was 40.04%.

Definition

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

Orbit International Corp's Gross Profit for the fiscal year that ended in Dec. 2015 is calculated as

 Gross Profit (A: Dec. 2015 ) = Revenue - Cost of Goods Sold = 20.13 - 12.464 = 7.67

Orbit International Corp's Gross Profit for the quarter that ended in Jun. 2016 is calculated as

 Gross Profit (Q: Jun. 2016 ) = Revenue - Cost of Goods Sold = 4.919 - 3.266 = 1.65

Orbit International Corp Gross Profit for the trailing twelve months (TTM) ended in Jun. 2016 was 2.03 (Jun. 2015 ) + 1.955 (Sep. 2015 ) + 2.298 (Dec. 2015 ) + 1.653 (Jun. 2016 ) = \$7.94 Mil.

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

Orbit International Corp's Gross Margin for the quarter that ended in Jun. 2016 is calculated as

 Gross Margin (Q: Jun. 2016 ) = Gross Profit (Q: Jun. 2016 ) / Revenue (Q: Jun. 2016 ) = (Revenue - Cost of Goods Sold) / Revenue = 1.65 / 4.919 = 33.60 %

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's 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

Orbit International Corp had a gross margin of 33.60% for the quarter that ended in Jun. 2016 => Competition eroding margins

Related Terms

Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Orbit International Corp Annual Data

 Dec06 Dec07 Dec08 Dec09 Dec10 Dec11 Dec12 Dec13 Dec14 Dec15 Gross_Profit 10.83 11.23 11.56 10.73 9.48 13.23 11.66 9.34 6.61 7.67

Orbit International Corp Quarterly Data

 Sep13 Dec13 Mar14 Jun14 Sep14 Dec14 Jun15 Sep15 Dec15 Jun16 Gross_Profit 2.37 1.99 1.50 2.24 1.76 1.11 2.03 1.96 2.30 1.65
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