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GuruFocus has detected 3 Warning Signs with Trio-Tech International \$TRT.
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Trio-Tech International (AMEX:TRT)
Gross Profit
\$9.13 Mil (TTM As of Dec. 2016)

Trio-Tech International's gross profit for the three months ended in Dec. 2016 was \$2.29 Mil. Trio-Tech International's gross profit for the trailing twelve months (TTM) ended in Dec. 2016 was \$9.13 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Trio-Tech International's gross profit for the three months ended in Dec. 2016 was \$2.29 Mil. Trio-Tech International's revenue for the three months ended in Dec. 2016 was \$9.10 Mil. Therefore, Trio-Tech International's Gross Margin for the quarter that ended in Dec. 2016 was 25.20%.

Trio-Tech International had a gross margin of 25.20% for the quarter that ended in Dec. 2016 => Competition eroding margins

During the past 13 years, the highest Gross Margin of Trio-Tech International was 26.30%. The lowest was 16.52%. And the median was 23.15%.

Definition

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

Trio-Tech International's Gross Profit for the fiscal year that ended in Jun. 2016 is calculated as

 Gross Profit (A: Jun. 2016 ) = Revenue - Cost of Goods Sold = 34.454 - 25.685 = 8.77

Trio-Tech International's Gross Profit for the quarter that ended in Dec. 2016 is calculated as

 Gross Profit (Q: Dec. 2016 ) = Revenue - Cost of Goods Sold = 9.104 - 6.81 = 2.29

Trio-Tech International Gross Profit for the trailing twelve months (TTM) ended in Dec. 2016 was 2.132 (Mar. 2016 ) + 2.344 (Jun. 2016 ) + 2.358 (Sep. 2016 ) + 2.294 (Dec. 2016 ) = \$9.13 Mil.

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

Trio-Tech International's Gross Margin for the quarter that ended in Dec. 2016 is calculated as

 Gross Margin (Q: Dec. 2016 ) = Gross Profit (Q: Dec. 2016 ) / Revenue (Q: Dec. 2016 ) = (Revenue - Cost of Goods Sold) / Revenue = 2.29 / 9.104 = 25.20 %

* 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

Trio-Tech International had a gross margin of 25.20% for the quarter that ended in Dec. 2016 => Competition eroding margins

Related Terms

Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Trio-Tech International Annual Data

 Jun07 Jun08 Jun09 Jun10 Jun11 Jun12 Jun13 Jun14 Jun15 Jun16 Gross_Profit 12.09 8.98 4.87 7.02 8.32 5.14 6.35 8.30 8.93 8.77

Trio-Tech International Quarterly Data

 Sep14 Dec14 Mar15 Jun15 Sep15 Dec15 Mar16 Jun16 Sep16 Dec16 Gross_Profit 1.80 2.44 2.49 2.20 2.18 2.12 2.13 2.34 2.36 2.29
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