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Peerless Systems Corp (NAS:PRLS)
Gross Profit
\$2.23 Mil (TTM As of Oct. 2014)

Peerless Systems Corp's gross profit for the three months ended in Oct. 2014 was \$0.50 Mil. Peerless Systems Corp's gross profit for the trailing twelve months (TTM) ended in Oct. 2014 was \$2.23 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Peerless Systems Corp's gross profit for the three months ended in Oct. 2014 was \$0.50 Mil. Peerless Systems Corp's revenue for the three months ended in Oct. 2014 was \$0.46 Mil. Therefore, Peerless Systems Corp's Gross Margin for the quarter that ended in Oct. 2014 was 91.48%.

Peerless Systems Corp had a gross margin of 91.48% for the quarter that ended in Oct. 2014 => Durable competitive advantage

Definition

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

Peerless Systems Corp's Gross Profit for the fiscal year that ended in Jan. 2014 is calculated as

 Gross Profit (A: Jan. 2014 ) = Revenue - Cost of Goods Sold = 3.605 - 0.273 = 3.33

Peerless Systems Corp's Gross Profit for the quarter that ended in Oct. 2014 is calculated as

 Gross Profit (Q: Oct. 2014 ) = Revenue - Cost of Goods Sold = 0.458 - 0.039 = 0.42

Peerless Systems Corp Gross Profit for the trailing twelve months (TTM) ended in Oct. 2014 was 0.721 (Jan. 2014 ) + 0.469 (Apr. 2014 ) + 0.547 (Jul. 2014 ) + 0.497 (Oct. 2014 ) = \$2.23 Mil.

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

Peerless Systems Corp's Gross Margin for the quarter that ended in Oct. 2014 is calculated as

 Gross Margin (Q: Oct. 2014 ) = Gross Profit (Q: Oct. 2014 ) / Revenue (Q: Oct. 2014 ) = (Revenue - Cost of Goods Sold) / Revenue = 0.42 / 0.458 = 91.48 %

* 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

Peerless Systems Corp had a gross margin of 91.48% for the quarter that ended in Oct. 2014 => Durable competitive advantage

Related Terms

Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Peerless Systems Corp Annual Data

 Jan05 Jan06 Jan07 Jan08 Jan09 Jan10 Jan11 Jan12 Jan13 Jan14 Gross_Profit 14.27 19.11 19.33 18.55 3.13 5.96 4.31 2.92 2.27 3.33

Peerless Systems Corp Quarterly Data

 Jul12 Oct12 Jan13 Apr13 Jul13 Oct13 Jan14 Apr14 Jul14 Oct14 Gross_Profit 0.46 0.45 0.80 0.97 0.80 0.83 0.72 0.47 0.55 0.50
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