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China Petroleum & Chemical Corp (NYSE:SNP)
Gross Profit
$79,423 Mil (TTM As of Dec. 2014)

China Petroleum & Chemical Corp's gross profit for the six months ended in Dec. 2014 was $79,423 Mil. China Petroleum & Chemical Corp's gross profit for the trailing twelve months (TTM) ended in Dec. 2014 was $79,423 Mil.

Gross Margin is calculated as gross profit divided by its revenue. China Petroleum & Chemical Corp's gross profit for the six months ended in Dec. 2014 was $79,423 Mil. China Petroleum & Chemical Corp's revenue for the six months ended in Dec. 2014 was $456,632 Mil. Therefore, China Petroleum & Chemical Corp's Gross Margin for the quarter that ended in Dec. 2014 was 17.39%.

China Petroleum & Chemical Corp had a gross margin of 17.39% for the quarter that ended in Dec. 2014 => No sustainable competitive advantage

During the past 13 years, the highest Gross Margin of China Petroleum & Chemical Corp was 26.31%. The lowest was 13.43%. And the median was 18.53%.

Warning Sign:

China Petroleum & Chemical Corp gross margin has been in long term decline. The average rate of decline per year is -7.8%.


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. 2014 is calculated as

Gross Profit (A: Dec. 2014 )=Revenue - Cost of Goods Sold
=456632.194681 - 377209.546586
=79,423

China Petroleum & Chemical Corp's Gross Profit for the quarter that ended in Dec. 2014 is calculated as

Gross Profit (Q: Dec. 2014 )=Revenue - Cost of Goods Sold
=456632.194681 - 377209.546586
=79,423

For company reported semi-annually, GuruFocus uses latest annual data as the TTM data. China Petroleum & Chemical Corp Gross Profit for the trailing twelve months (TTM) ended in Dec. 2014 was $79,423 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 Dec. 2014 is calculated as

Gross Margin (Q: Dec. 2014 )=Gross Profit (Q: Dec. 2014 ) / Revenue (Q: Dec. 2014 )
=(Revenue - Cost of Goods Sold) / Revenue
=79,423 / 456632.194681
=17.39 %

* 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 17.39% for the quarter that ended in Dec. 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

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
Gross_Profit 20,51925,45930,27829,28751,83763,92573,20477,78783,71079,423

China Petroleum & Chemical Corp Semi-Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
Gross_Profit 20,51925,45930,27829,28751,83763,92573,20477,78783,71079,423
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