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GuruFocus has detected 6 Warning Signs with United States Lime & Minerals Inc $USLM.
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United States Lime & Minerals Inc (NAS:USLM)
Gross Profit
$33.1 Mil (TTM As of Dec. 2016)

United States Lime & Minerals Inc's gross profit for the three months ended in Dec. 2016 was $7.4 Mil. United States Lime & Minerals Inc's gross profit for the trailing twelve months (TTM) ended in Dec. 2016 was $33.1 Mil.

Gross Margin is calculated as gross profit divided by its revenue. United States Lime & Minerals Inc's gross profit for the three months ended in Dec. 2016 was $7.4 Mil. United States Lime & Minerals Inc's revenue for the three months ended in Dec. 2016 was $34.2 Mil. Therefore, United States Lime & Minerals Inc's Gross Margin for the quarter that ended in Dec. 2016 was 21.76%.

United States Lime & Minerals Inc had a gross margin of 21.76% for the quarter that ended in Dec. 2016 => Competition eroding margins

During the past 13 years, the highest Gross Margin of United States Lime & Minerals Inc was 29.00%. The lowest was 20.77%. And the median was 23.95%.

Warning Sign:

United States Lime & Minerals Inc gross margin has been in long term decline. The average rate of decline per year is -3.4%.


Definition

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

United States Lime & Minerals Inc's Gross Profit for the fiscal year that ended in Dec. 2016 is calculated as

Gross Profit (A: Dec. 2016 )=Revenue - Cost of Goods Sold
=139.282 - 106.19
=33.1

United States Lime & Minerals Inc's Gross Profit for the quarter that ended in Dec. 2016 is calculated as

Gross Profit (Q: Dec. 2016 )=Revenue - Cost of Goods Sold
=34.166 - 26.732
=7.4

United States Lime & Minerals Inc Gross Profit for the trailing twelve months (TTM) ended in Dec. 2016 was 7.848 (Mar. 2016 ) + 7.241 (Jun. 2016 ) + 10.569 (Sep. 2016 ) + 7.434 (Dec. 2016 ) = $33.1 Mil.

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

United States Lime & Minerals Inc'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
=7.4 / 34.166
=21.76 %

* 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

United States Lime & Minerals Inc had a gross margin of 21.76% for the quarter that ended in Dec. 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 local exchange's currency.

United States Lime & Minerals Inc Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
Gross_Profit 26.031.328.836.041.333.430.836.828.733.1

United States Lime & Minerals Inc Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
Gross_Profit 9.97.95.97.010.45.57.87.210.67.4
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