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Targa Resources Corp (NYSE:TRGP)
Gross Profit
$1,417 Mil (TTM As of Mar. 2016)

Targa Resources Corp's gross profit for the three months ended in Mar. 2016 was $299 Mil. Targa Resources Corp's gross profit for the trailing twelve months (TTM) ended in Mar. 2016 was $1,417 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Targa Resources Corp's gross profit for the three months ended in Mar. 2016 was $299 Mil. Targa Resources Corp's revenue for the three months ended in Mar. 2016 was $1,442 Mil. Therefore, Targa Resources Corp's Gross Margin for the quarter that ended in Mar. 2016 was 20.75%.

Targa Resources Corp had a gross margin of 20.75% for the quarter that ended in Mar. 2016 => Competition eroding margins

During the past 8 years, the highest Gross Margin of Targa Resources Corp was 19.24%. The lowest was 9.76%. And the median was 16.76%.


Definition

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

Targa Resources 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
=6658.6 - 5377.6
=1,281

Targa Resources 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
=1442.4 - 1143.1
=299

Targa Resources Corp Gross Profit for the trailing twelve months (TTM) ended in Mar. 2016 was 462.4 (Jun. 2015 ) + 326.1 (Sep. 2015 ) + 329.4 (Dec. 2015 ) + 299.3 (Mar. 2016 ) = $1,417 Mil.

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

Targa Resources 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
=299 / 1442.4
=20.75 %

* 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

Targa Resources Corp had a gross margin of 20.75% for the quarter that ended in Mar. 2016 => 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.

Targa Resources Corp Annual Data

Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
Gross_Profit 007807457829561,0071,1781,5701,281

Targa Resources Corp Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
Gross_Profit -21380384295289300462326329299
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