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The Valspar Corp (NYSE:VAL)
Gross Profit
$1,537 Mil (TTM As of Jan. 2016)

The Valspar Corp's gross profit for the three months ended in Jan. 2016 was $319 Mil. The Valspar Corp's gross profit for the trailing twelve months (TTM) ended in Jan. 2016 was $1,537 Mil.

Gross Margin is calculated as gross profit divided by its revenue. The Valspar Corp's gross profit for the three months ended in Jan. 2016 was $319 Mil. The Valspar Corp's revenue for the three months ended in Jan. 2016 was $886 Mil. Therefore, The Valspar Corp's Gross Margin for the quarter that ended in Jan. 2016 was 35.97%.

The Valspar Corp had a gross margin of 35.97% for the quarter that ended in Jan. 2016 => Competition eroding margins

During the past 13 years, the highest Gross Margin of The Valspar Corp was 34.03%. The lowest was 28.07%. And the median was 32.13%.


Definition

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

The Valspar Corp's Gross Profit for the fiscal year that ended in Oct. 2014 is calculated as

Gross Profit (A: Oct. 2014 )=Revenue - Cost of Goods Sold
=4522.424 - 2983.378
=1,539

The Valspar Corp's Gross Profit for the quarter that ended in Jan. 2016 is calculated as

Gross Profit (Q: Jan. 2016 )=Revenue - Cost of Goods Sold
=885.756 - 567.129
=319

The Valspar Corp Gross Profit for the trailing twelve months (TTM) ended in Jan. 2016 was 393.203 (Apr. 2015 ) + 411.283 (Jul. 2015 ) + 413.611 (Oct. 2015 ) + 318.627 (Jan. 2016 ) = $1,537 Mil.

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

The Valspar Corp'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
=319 / 885.756
=35.97 %

* 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

The Valspar Corp had a gross margin of 35.97% 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.

The Valspar Corp Annual Data

Oct06Oct07Oct08Oct09Oct10Oct11Oct12Oct13Oct14Oct15
Gross_Profit 9069729779791,0721,2321,3541,3581,5391,551

The Valspar Corp Quarterly Data

Jan14Apr14Jul14Oct14Jan15Apr15Jul15Oct15Jan16Apr16
Gross_Profit 319381417423333393411414319401
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