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Vulcan Materials Co (NYSE:VMC)
Gross Profit
$443 Mil (TTM As of Mar. 2014)

Vulcan Materials Co's gross profit for the three months ended in Mar. 2014 was $34 Mil. Vulcan Materials Co's gross profit for the trailing twelve months (TTM) ended in Mar. 2014 was $443 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Vulcan Materials Co's gross profit for the three months ended in Mar. 2014 was $34 Mil. Vulcan Materials Co's revenue for the three months ended in Mar. 2014 was $574 Mil. Therefore, Vulcan Materials Co's Gross Margin for the quarter that ended in Mar. 2014 was 5.94%.

Vulcan Materials Co had a gross margin of 5.94% for the quarter that ended in Mar. 2014 => No sustainable competitive advantage

During the past 13 years, the highest Gross Margin of Vulcan Materials Co was 38.28%. The lowest was 11.07%. And the median was 24.06%.

Warning Sign:

Vulcan Materials Co gross margin has been in long term decline. The average rate of decline per year is -6.2%.


Definition

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

Vulcan Materials Co's Gross Profit for the fiscal year that ended in Dec. 2013 is calculated as

Gross Profit (A: Dec. 2013 )=Revenue - Cost of Goods Sold
=2770.709 - 2343.829
=427

Vulcan Materials Co's Gross Profit for the quarter that ended in Mar. 2014 is calculated as

Gross Profit (Q: Mar. 2014 )=Revenue - Cost of Goods Sold
=574.42 - 540.328
=34

Vulcan Materials Co Gross Profit for the trailing twelve months (TTM) ended in Mar. 2014 was 132.895 (Jun. 2013 ) + 158.983 (Sep. 2013 ) + 117.347 (Dec. 2013 ) + 34.092 (Mar. 2014 ) = $443 Mil.

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

Vulcan Materials Co's Gross Margin for the quarter that ended in Mar. 2014 is calculated as

Gross Margin (Q: Mar. 2014 )=Gross Profit (Q: Mar. 2014 ) / Revenue (Q: Mar. 2014 )
=(Revenue - Cost of Goods Sold) / Revenue
=34 / 574.42
=5.94 %

* 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

Vulcan Materials Co had a gross margin of 5.94% for the quarter that ended in Mar. 2014 => No sustainable competitive advantage


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.

Vulcan Materials Co Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Gross_Profit 583709932951750446301284334427

Vulcan Materials Co Quarterly Data

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
Gross_Profit 7422106127791813315911734
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