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SanDisk Corp (NAS:SNDK)
Gross Profit
\$2,255 Mil (TTM As of Mar. 2016)

SanDisk Corp's gross profit for the three months ended in Mar. 2016 was \$543 Mil. SanDisk Corp's gross profit for the trailing twelve months (TTM) ended in Mar. 2016 was \$2,255 Mil.

Gross Margin is calculated as gross profit divided by its revenue. SanDisk Corp's gross profit for the three months ended in Mar. 2016 was \$543 Mil. SanDisk Corp's revenue for the three months ended in Mar. 2016 was \$1,366 Mil. Therefore, SanDisk Corp's Gross Margin for the quarter that ended in Mar. 2016 was 39.78%.

SanDisk Corp had a gross margin of 39.78% for the quarter that ended in Mar. 2016 => Competition eroding margins

Definition

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

SanDisk 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 = 5564.872 - 3307.803 = 2,257

SanDisk Corp's Gross Profit for the quarter that ended in Mar. 2016 is calculated as

 Gross Profit (Q: Mar. 2016 ) = Revenue - Cost of Goods Sold = 1365.736 - 822.411 = 543

SanDisk Corp Gross Profit for the trailing twelve months (TTM) ended in Mar. 2016 was 484.379 (Jun. 2015 ) + 602.83 (Sep. 2015 ) + 624.858 (Dec. 2015 ) + 543.325 (Mar. 2016 ) = \$2,255 Mil.

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

SanDisk Corp's Gross Margin for the quarter that ended in Mar. 2016 is calculated as

 Gross Margin (Q: Mar. 2016 ) = Gross Profit (Q: Mar. 2016 ) / Revenue (Q: Mar. 2016 ) = (Revenue - Cost of Goods Sold) / Revenue = 543 / 1365.736 = 39.78 %

* 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

SanDisk Corp had a gross margin of 39.78% for the quarter that ended in Mar. 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.

SanDisk Corp Annual Data

 Dec06 Dec07 Dec08 Dec09 Dec10 Dec11 Dec12 Dec13 Dec14 Dec15 Gross_Profit 1,239 1,203 63 1,285 2,262 2,439 1,683 2,867 3,068 2,257

SanDisk Corp Quarterly Data

 Dec13 Mar14 Jun14 Sep14 Dec14 Mar15 Jun15 Sep15 Dec15 Mar16 Gross_Profit 857 751 760 817 740 545 484 603 625 543
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