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Tata Motors Ltd (NYSE:TTM)
Gross Profit
$16,371 Mil (TTM As of Jun. 2014)

Tata Motors Ltd's gross profit for the three months ended in Jun. 2014 was $3,505 Mil. Tata Motors Ltd's gross profit for the trailing twelve months (TTM) ended in Jun. 2014 was $16,371 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Tata Motors Ltd's gross profit for the three months ended in Jun. 2014 was $3,505 Mil. Tata Motors Ltd's revenue for the three months ended in Jun. 2014 was $9,135 Mil. Therefore, Tata Motors Ltd's Gross Margin for the quarter that ended in Jun. 2014 was 38.37%.

Tata Motors Ltd had a gross margin of 38.37% for the quarter that ended in Jun. 2014 => Competition eroding margins

During the past 13 years, the highest Gross Margin of Tata Motors Ltd was 38.30%. The lowest was 18.84%. And the median was 31.19%.


Definition

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

Tata Motors Ltd's Gross Profit for the fiscal year that ended in Mar. 2014 is calculated as

Gross Profit (A: Mar. 2014 )=Revenue - Cost of Goods Sold
=39378.5778894 - 24297.9296482
=15,081

Tata Motors Ltd's Gross Profit for the quarter that ended in Jun. 2014 is calculated as

Gross Profit (Q: Jun. 2014 )=Revenue - Cost of Goods Sold
=9134.81228669 - 5629.69283276
=3,505

Tata Motors Ltd Gross Profit for the trailing twelve months (TTM) ended in Jun. 2014 was 3523.41706924 (Sep. 2013 ) + 3347.61120264 (Dec. 2013 ) + 5995.21943049 (Mar. 2014 ) + 3505.11945392 (Jun. 2014 ) = $16,371 Mil.

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

Tata Motors Ltd's Gross Margin for the quarter that ended in Jun. 2014 is calculated as

Gross Margin (Q: Jun. 2014 )=Gross Profit (Q: Jun. 2014 ) / Revenue (Q: Jun. 2014 )
=(Revenue - Cost of Goods Sold) / Revenue
=3,505 / 9134.81228669
=38.37 %

* 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

Tata Motors Ltd had a gross margin of 38.37% for the quarter that ended in Jun. 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.

Tata Motors Ltd Annual Data

Mar05Mar06Mar07Mar08Mar09Mar10Mar11Mar12Mar13Mar14
Gross_Profit 9551,1721,5953,0694,7416,5329,94511,08312,81615,081

Tata Motors Ltd Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
Gross_Profit 4,6582,7872,9302,2283,8572,4393,5233,3485,9953,505
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