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Toro Co (NYSE:TTC)
Gross Profit
$850 Mil (TTM As of Jan. 2016)

Toro Co's gross profit for the three months ended in Jan. 2016 was $183 Mil. Toro Co's gross profit for the trailing twelve months (TTM) ended in Jan. 2016 was $850 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Toro Co's gross profit for the three months ended in Jan. 2016 was $183 Mil. Toro Co's revenue for the three months ended in Jan. 2016 was $486 Mil. Therefore, Toro Co's Gross Margin for the quarter that ended in Jan. 2016 was 37.55%.

Toro Co had a gross margin of 37.55% for the quarter that ended in Jan. 2016 => Competition eroding margins

During the past 13 years, the highest Gross Margin of Toro Co was 36.14%. The lowest was 33.54%. And the median was 34.86%.


Definition

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

Toro Co's Gross Profit for the fiscal year that ended in Oct. 2015 is calculated as

Gross Profit (A: Oct. 2015 )=Revenue - Cost of Goods Sold
=2390.875 - 1554.94
=836

Toro Co's Gross Profit for the quarter that ended in Jan. 2016 is calculated as

Gross Profit (Q: Jan. 2016 )=Revenue - Cost of Goods Sold
=486.398 - 303.744
=183

Toro Co Gross Profit for the trailing twelve months (TTM) ended in Jan. 2016 was 281.972 (Apr. 2015 ) + 216.39 (Jul. 2015 ) + 168.574 (Oct. 2015 ) + 182.654 (Jan. 2016 ) = $850 Mil.

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

Toro Co's Gross Margin for the quarter that ended in Jan. 2016 is calculated as

Gross Margin (Q: Jan. 2016 )=Gross Profit (Q: Jan. 2016 ) / Revenue (Q: Jan. 2016 )
=(Revenue - Cost of Goods Sold) / Revenue
=183 / 486.398
=37.55 %

* 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

Toro Co had a gross margin of 37.55% for the quarter that ended in Jan. 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.

Toro Co Annual Data

Oct06Oct07Oct08Oct09Oct10Oct11Oct12Oct13Oct14Oct15
Gross_Profit 643678653511576637673725773836

Toro Co Quarterly Data

Oct13Jan14Apr14Jul14Oct14Jan15Apr15Jul15Oct15Jan16
Gross_Profit 129164265202143169282216169183
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