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GuruFocus has detected 1 Warning Sign with Ryder System Inc $R.
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Ryder System Inc (NYSE:R)
Gross Profit
$1,501 Mil (TTM As of Dec. 2016)

Ryder System Inc's gross profit for the three months ended in Dec. 2016 was $377 Mil. Ryder System Inc's gross profit for the trailing twelve months (TTM) ended in Dec. 2016 was $1,501 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Ryder System Inc's gross profit for the three months ended in Dec. 2016 was $377 Mil. Ryder System Inc's revenue for the three months ended in Dec. 2016 was $1,729 Mil. Therefore, Ryder System Inc's Gross Margin for the quarter that ended in Dec. 2016 was 21.81%.

Ryder System Inc had a gross margin of 21.81% for the quarter that ended in Dec. 2016 => Competition eroding margins

During the past 13 years, the highest Gross Margin of Ryder System Inc was 57.71%. The lowest was 19.96%. And the median was 21.50%.


Definition

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

Ryder System Inc's Gross Profit for the fiscal year that ended in Dec. 2016 is calculated as

Gross Profit (A: Dec. 2016 )=Revenue - Cost of Goods Sold
=6786.984 - 5285.568
=1,501

Ryder System Inc's Gross Profit for the quarter that ended in Dec. 2016 is calculated as

Gross Profit (Q: Dec. 2016 )=Revenue - Cost of Goods Sold
=1729.15 - 1351.956
=377

Ryder System Inc Gross Profit for the trailing twelve months (TTM) ended in Dec. 2016 was 346.567 (Mar. 2016 ) + 386.835 (Jun. 2016 ) + 390.82 (Sep. 2016 ) + 377.194 (Dec. 2016 ) = $1,501 Mil.

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

Ryder System Inc's Gross Margin for the quarter that ended in Dec. 2016 is calculated as

Gross Margin (Q: Dec. 2016 )=Gross Profit (Q: Dec. 2016 ) / Revenue (Q: Dec. 2016 )
=(Revenue - Cost of Goods Sold) / Revenue
=377 / 1729.15
=21.81 %

* 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

Ryder System Inc had a gross margin of 21.81% for the quarter that ended in Dec. 2016 => 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 local exchange's currency.

Ryder System Inc Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
Gross_Profit 3,7892,8852,3931,0701,2451,2491,3201,3861,4851,501

Ryder System Inc Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
Gross_Profit 362370330386383387347387391377
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