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Rose Rock Midstream LP (NYSE:RRMS)
Gross Profit
\$97.6 Mil (TTM As of Jun. 2016)

Rose Rock Midstream LP's gross profit for the three months ended in Jun. 2016 was \$20.7 Mil. Rose Rock Midstream LP's gross profit for the trailing twelve months (TTM) ended in Jun. 2016 was \$97.6 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Rose Rock Midstream LP's gross profit for the three months ended in Jun. 2016 was \$20.7 Mil. Rose Rock Midstream LP's revenue for the three months ended in Jun. 2016 was \$169.1 Mil. Therefore, Rose Rock Midstream LP's Gross Margin for the quarter that ended in Jun. 2016 was 12.21%.

Rose Rock Midstream LP had a gross margin of 12.21% for the quarter that ended in Jun. 2016 => No sustainable competitive advantage

Definition

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

Rose Rock Midstream LP'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 = 844.711 - 754.903 = 89.8

Rose Rock Midstream LP's Gross Profit for the quarter that ended in Jun. 2016 is calculated as

 Gross Profit (Q: Jun. 2016 ) = Revenue - Cost of Goods Sold = 169.144 - 148.489 = 20.7

Rose Rock Midstream LP Gross Profit for the trailing twelve months (TTM) ended in Jun. 2016 was 26.761 (Sep. 2015 ) + 19.028 (Dec. 2015 ) + 31.153 (Mar. 2016 ) + 20.655 (Jun. 2016 ) = \$97.6 Mil.

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

Rose Rock Midstream LP'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 = 20.7 / 169.144 = 12.21 %

* 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

Rose Rock Midstream LP had a gross margin of 12.21% for the quarter that ended in Jun. 2016 => No sustainable competitive advantage

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.

Rose Rock Midstream LP Annual Data

 Dec09 Dec10 Dec11 Dec12 Dec13 Dec14 Dec15 Gross_Profit 0.0 0.0 0.0 44.8 41.1 46.1 50.1 67.3 86.6 89.8

Rose Rock Midstream LP Quarterly Data

 Mar14 Jun14 Sep14 Dec14 Mar15 Jun15 Sep15 Dec15 Mar16 Jun16 Gross_Profit 22.8 19.0 21.1 23.8 17.7 26.5 26.8 19.0 31.2 20.7
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