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Parexel International Corp (NAS:PRXL)
Gross Profit
$660 Mil (TTM As of Jun. 2014)

Parexel International Corp's gross profit for the three months ended in Jun. 2014 was $182 Mil. Parexel International Corp's gross profit for the trailing twelve months (TTM) ended in Jun. 2014 was $660 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Parexel International Corp's gross profit for the three months ended in Jun. 2014 was $182 Mil. Parexel International Corp's revenue for the three months ended in Jun. 2014 was $585 Mil. Therefore, Parexel International Corp's Gross Margin for the quarter that ended in Jun. 2014 was 31.15%.

Parexel International Corp had a gross margin of 31.15% for the quarter that ended in Jun. 2014 => Competition eroding margins

During the past 13 years, the highest Gross Margin of Parexel International Corp was 45.94%. The lowest was 24.40%. And the median was 28.80%.

Warning Sign:

Parexel International Corp gross margin has been in long term decline. The average rate of decline per year is -2.6%.


Definition

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

Parexel International Corp's Gross Profit for the fiscal year that ended in Jun. 2013 is calculated as

Gross Profit (A: Jun. 2013 )=Revenue - Cost of Goods Sold
=1995.966 - 1469.06
=527

Parexel International Corp's Gross Profit for the quarter that ended in Jun. 2014 is calculated as

Gross Profit (Q: Jun. 2014 )=Revenue - Cost of Goods Sold
=585.124 - 402.857
=182

Parexel International Corp Gross Profit for the trailing twelve months (TTM) ended in Jun. 2014 was 146.051 (Sep. 2013 ) + 162.638 (Dec. 2013 ) + 169.226 (Mar. 2014 ) + 182.267 (Jun. 2014 ) = $660 Mil.

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

Parexel International Corp's Gross Margin for the quarter that ended in Jun. 2014 is calculated as

Gross Margin (Q: Jun. 2014 )=Gross Profit (Q: Jun. 2014 ) / Revenue (Q: Jun. 2014 )
=(Revenue - Cost of Goods Sold) / Revenue
=182 / 585.124
=31.15 %

* 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

Parexel International Corp had a gross margin of 31.15% for the quarter that ended in Jun. 2014 => Competition eroding margins


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.

Parexel International Corp Annual Data

Jun04Jun05Jun06Jun07Jun08Jun09Jun10Jun11Jun12Jun13
Gross_Profit 303185209255335376426426425527

Parexel International Corp Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
Gross_Profit 115113115121143148146163169182
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