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Valspar Corp (NYSE:VAL)
Gross Profit
$1,553 Mil (TTM As of Jan. 2015)

Valspar Corp's gross profit for the three months ended in Jan. 2015 was $333 Mil. Valspar Corp's gross profit for the trailing twelve months (TTM) ended in Jan. 2015 was $1,553 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Valspar Corp's gross profit for the three months ended in Jan. 2015 was $333 Mil. Valspar Corp's revenue for the three months ended in Jan. 2015 was $1,015 Mil. Therefore, Valspar Corp's Gross Margin for the quarter that ended in Jan. 2015 was 32.85%.

Valspar Corp had a gross margin of 32.85% for the quarter that ended in Jan. 2015 => Competition eroding margins

During the past 13 years, the highest Gross Margin of Valspar Corp was 34.03%. The lowest was 28.07%. And the median was 32.52%.


Definition

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

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

Valspar Corp's Gross Profit for the quarter that ended in Jan. 2015 is calculated as

Gross Profit (Q: Jan. 2015 )=Revenue - Cost of Goods Sold
=1014.669 - 681.377
=333

Valspar Corp Gross Profit for the trailing twelve months (TTM) ended in Jan. 2015 was 380.758 (Apr. 2014 ) + 416.692 (Jul. 2014 ) + 422.543 (Oct. 2014 ) + 333.292 (Jan. 2015 ) = $1,553 Mil.

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

Valspar Corp's Gross Margin for the quarter that ended in Jan. 2015 is calculated as

Gross Margin (Q: Jan. 2015 )=Gross Profit (Q: Jan. 2015 ) / Revenue (Q: Jan. 2015 )
=(Revenue - Cost of Goods Sold) / Revenue
=333 / 1014.669
=32.85 %

* 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

Valspar Corp had a gross margin of 32.85% for the quarter that ended in Jan. 2015 => 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.

Valspar Corp Annual Data

Oct05Oct06Oct07Oct08Oct09Oct10Oct11Oct12Oct13Oct14
Gross_Profit 7869069729779791,0721,2321,3541,3581,539

Valspar Corp Quarterly Data

Oct12Jan13Apr13Jul13Oct13Jan14Apr14Jul14Oct14Jan15
Gross_Profit 341294339369356319381417423333
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