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Sonic Corp (NAS:SONC)
Gross Profit
$246.2 Mil (TTM As of Nov. 2016)

Sonic Corp's gross profit for the three months ended in Nov. 2016 was $54.2 Mil. Sonic Corp's gross profit for the trailing twelve months (TTM) ended in Nov. 2016 was $246.2 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Sonic Corp's gross profit for the three months ended in Nov. 2016 was $54.2 Mil. Sonic Corp's revenue for the three months ended in Nov. 2016 was $129.6 Mil. Therefore, Sonic Corp's Gross Margin for the quarter that ended in Nov. 2016 was 41.87%.

Sonic Corp had a gross margin of 41.87% for the quarter that ended in Nov. 2016 => Durable competitive advantage

During the past 13 years, the highest Gross Margin of Sonic Corp was 41.72%. The lowest was 31.89%. And the median was 36.03%.


Definition

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

Sonic Corp's Gross Profit for the fiscal year that ended in Aug. 2016 is calculated as

Gross Profit (A: Aug. 2016 )=Revenue - Cost of Goods Sold
=606.32 - 356.82
=249.5

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

Gross Profit (Q: Nov. 2016 )=Revenue - Cost of Goods Sold
=129.551 - 75.308
=54.2

Sonic Corp Gross Profit for the trailing twelve months (TTM) ended in Nov. 2016 was 51.488 (Feb. 2016 ) + 70.796 (May. 2016 ) + 69.631 (Aug. 2016 ) + 54.243 (Nov. 2016 ) = $246.2 Mil.

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

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

Gross Margin (Q: Nov. 2016 )=Gross Profit (Q: Nov. 2016 ) / Revenue (Q: Nov. 2016 )
=(Revenue - Cost of Goods Sold) / Revenue
=54.2 / 129.551
=41.87 %

* 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

Sonic Corp had a gross margin of 41.87% for the quarter that ended in Nov. 2016 => Durable 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 local exchange's currency.

Sonic Corp Annual Data

Aug07Aug08Aug09Aug10Aug11Aug12Aug13Aug14Aug15Aug16
Gross_Profit 276.9256.6241.4196.3189.7196.3199.4210.2242.2249.5

Sonic Corp Quarterly Data

Aug14Nov14Feb15May15Aug15Nov15Feb16May16Aug16Nov16
Gross_Profit 4.253.446.668.274.057.651.570.869.654.2
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