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China Petroleum & Chemical Corp (NYSE:SNP)
Gross Profit
$83,836 Mil (TTM As of Jun. 2014)

China Petroleum & Chemical Corp's gross profit for the three months ended in Jun. 2014 was $20,395 Mil. China Petroleum & Chemical Corp's gross profit for the trailing twelve months (TTM) ended in Jun. 2014 was $83,836 Mil.

Gross Margin is calculated as gross profit divided by its revenue. China Petroleum & Chemical Corp's gross profit for the three months ended in Jun. 2014 was $20,395 Mil. China Petroleum & Chemical Corp's revenue for the three months ended in Jun. 2014 was $115,377 Mil. Therefore, China Petroleum & Chemical Corp's Gross Margin for the quarter that ended in Jun. 2014 was 17.68%.

China Petroleum & Chemical Corp had a gross margin of 17.68% for the quarter that ended in Jun. 2014 => No sustainable competitive advantage

During the past 13 years, the highest Gross Margin of China Petroleum & Chemical Corp was 30.76%. The lowest was 13.91%. And the median was 21.94%.


Definition

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

China Petroleum & Chemical Corp's Gross Profit for the fiscal year that ended in Dec. 2013 is calculated as

Gross Profit (A: Dec. 2013 )=Revenue - Cost of Goods Sold
=476005.784168 - 391977.8549
=84,028

China Petroleum & Chemical 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
=115377.057115 - 94982.2523395
=20,395

China Petroleum & Chemical Corp Gross Profit for the trailing twelve months (TTM) ended in Jun. 2014 was 21705.8823529 (Sep. 2013 ) + 21747.4797554 (Dec. 2013 ) + 19987.7911647 (Mar. 2014 ) + 20394.8047757 (Jun. 2014 ) = $83,836 Mil.

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

China Petroleum & Chemical 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
=20,395 / 115377.057115
=17.68 %

* 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

China Petroleum & Chemical Corp had a gross margin of 17.68% for the quarter that ended in Jun. 2014 => No sustainable competitive advantage


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.

China Petroleum & Chemical Corp Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Gross_Profit 20,51521,09325,88530,77330,57050,39563,63672,94675,42884,028

China Petroleum & Chemical Corp Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
Gross_Profit 17,53417,47218,71120,93520,40818,01421,70621,74719,98820,395
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