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Toll Brothers Inc (NYSE:TOL)
Gross Profit
$830 Mil (TTM As of Oct. 2014)

Toll Brothers Inc's gross profit for the three months ended in Oct. 2014 was $288 Mil. Toll Brothers Inc's gross profit for the trailing twelve months (TTM) ended in Oct. 2014 was $830 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Toll Brothers Inc's gross profit for the three months ended in Oct. 2014 was $288 Mil. Toll Brothers Inc's revenue for the three months ended in Oct. 2014 was $1,351 Mil. Therefore, Toll Brothers Inc's Gross Margin for the quarter that ended in Oct. 2014 was 21.33%.

Toll Brothers Inc had a gross margin of 21.33% for the quarter that ended in Oct. 2014 => Competition eroding margins

During the past 13 years, the highest Gross Margin of Toll Brothers Inc was 32.21%. The lowest was -11.17%. And the median was 23.23%.


Definition

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

Toll Brothers Inc's Gross Profit for the fiscal year that ended in Oct. 2014 is calculated as

Gross Profit (A: Oct. 2014 )=Revenue - Cost of Goods Sold
=3911.602 - 3081.837
=830

Toll Brothers Inc's Gross Profit for the quarter that ended in Oct. 2014 is calculated as

Gross Profit (Q: Oct. 2014 )=Revenue - Cost of Goods Sold
=1350.69 - 1062.575
=288

Toll Brothers Inc Gross Profit for the trailing twelve months (TTM) ended in Oct. 2014 was 129.649 (Jan. 2014 ) + 172.376 (Apr. 2014 ) + 239.625 (Jul. 2014 ) + 288.115 (Oct. 2014 ) = $830 Mil.

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

Toll Brothers Inc's Gross Margin for the quarter that ended in Oct. 2014 is calculated as

Gross Margin (Q: Oct. 2014 )=Gross Profit (Q: Oct. 2014 ) / Revenue (Q: Oct. 2014 )
=(Revenue - Cost of Goods Sold) / Revenue
=288 / 1350.69
=21.33 %

* 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

Toll Brothers Inc had a gross margin of 21.33% for the quarter that ended in Oct. 2014 => Competition eroding margins


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.

Toll Brothers Inc Annual Data

Oct05Oct06Oct07Oct08Oct09Oct10Oct11Oct12Oct13Oct14
Gross_Profit 1,8661,721624121-196112215351541830

Toll Brothers Inc Quarterly Data

Jul12Oct12Jan13Apr13Jul13Oct13Jan14Apr14Jul14Oct14
Gross_Profit 1061277996144222130172240288
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