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TSR Inc (NAS:TSRI)
Gross Profit
$8.21 Mil (TTM As of Feb. 2014)

TSR Inc's gross profit for the three months ended in Feb. 2014 was $1.93 Mil. TSR Inc's gross profit for the trailing twelve months (TTM) ended in Feb. 2014 was $8.21 Mil.

Gross Margin is calculated as gross profit divided by its revenue. TSR Inc's gross profit for the three months ended in Feb. 2014 was $1.93 Mil. TSR Inc's revenue for the three months ended in Feb. 2014 was $12.13 Mil. Therefore, TSR Inc's Gross Margin for the quarter that ended in Feb. 2014 was 15.91%.

TSR Inc had a gross margin of 15.91% for the quarter that ended in Feb. 2014 => No sustainable competitive advantage

During the past 13 years, the highest Gross Margin of TSR Inc was 27.70%. The lowest was 16.40%. And the median was 21.67%.

Warning Sign:

TSR, Inc. gross margin has been in long term decline. The average rate of decline per year is -2.1%.


Definition

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

TSR Inc's Gross Profit for the fiscal year that ended in May. 2013 is calculated as

Gross Profit (A: May. 2013 )=Revenue - Cost of Goods Sold
=44.914 - 37.549
=7.37

TSR Inc's Gross Profit for the quarter that ended in Feb. 2014 is calculated as

Gross Profit (Q: Feb. 2014 )=Revenue - Cost of Goods Sold
=12.128 - 10.199
=1.93

TSR Inc Gross Profit for the trailing twelve months (TTM) ended in Feb. 2014 was 2.12 (May. 2013 ) + 2.098 (Aug. 2013 ) + 2.066 (Nov. 2013 ) + 1.929 (Feb. 2014 ) = $8.21 Mil.

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

TSR Inc's Gross Margin for the quarter that ended in Feb. 2014 is calculated as

Gross Margin (Q: Feb. 2014 )=Gross Profit (Q: Feb. 2014 ) / Revenue (Q: Feb. 2014 )
=(Revenue - Cost of Goods Sold) / Revenue
=1.93 / 12.128
=15.91 %

* 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

TSR Inc had a gross margin of 15.91% for the quarter that ended in Feb. 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.

TSR Inc Annual Data

May04May05May06May07May08May09May10May11May12May13
Gross_Profit 11.4711.159.359.169.427.686.537.197.467.37

TSR Inc Quarterly Data

Nov11Feb12May12Aug12Nov12Feb13May13Aug13Nov13Feb14
Gross_Profit 1.891.721.941.851.761.642.122.102.071.93
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