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Western Digital Corporation (NAS:WDC)
Gross Profit
$4,340 Mil (TTM As of Dec. 2013)

Western Digital Corporation's gross profit for the three months ended in Dec. 2013 was $1,141 Mil. Western Digital Corporation's gross profit for the trailing twelve months (TTM) ended in Dec. 2013 was $4,340 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Western Digital Corporation's gross profit for the three months ended in Dec. 2013 was $1,141 Mil. Western Digital Corporation's revenue for the three months ended in Dec. 2013 was $3,972 Mil. Therefore, Western Digital Corporation's Gross Margin for the quarter that ended in Dec. 2013 was 28.73%.

Western Digital Corporation had a gross margin of 28.73% for the quarter that ended in Dec. 2013 => Competition eroding margins

During the past 13 years, the highest Gross Margin of Western Digital Corporation was 29.16%. The lowest was 0.49%. And the median was 16.46%.


Definition

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

Western Digital Corporation's Gross Profit for the fiscal year that ended in Jun. 2013 is calculated as

Gross Profit (A: Jun. 2013 )=Revenue - Cost of Goods Sold
=15351 - 10988
=4,363

Western Digital Corporation's Gross Profit for the quarter that ended in Dec. 2013 is calculated as

Gross Profit (Q: Dec. 2013 )=Revenue - Cost of Goods Sold
=3972 - 2831
=1,141

Western Digital Corporation Gross Profit for the trailing twelve months (TTM) ended in Dec. 2013 was 1061 (Mar. 2013 ) + 1050 (Jun. 2013 ) + 1088 (Sep. 2013 ) + 1141 (Dec. 2013 ) = $4,340 Mil.

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

Western Digital Corporation's Gross Margin for the quarter that ended in Dec. 2013 is calculated as

Gross Margin (Q: Dec. 2013 )=Gross Profit (Q: Dec. 2013 ) / Revenue (Q: Dec. 2013 )
=(Revenue - Cost of Goods Sold) / Revenue
=1,141 / 3972
=28.73 %

* 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

Western Digital Corporation had a gross margin of 28.73% for the quarter that ended in Dec. 2013 => 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.

Western Digital Corporation Annual Data

Jun04Jun05Jun06Jun07Jun08Jun09Jun10Jun11Jun12Jun13
Gross_Profit 4615908299001,7391,3372,4011,7913,6384,363

Western Digital Corporation Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
Gross_Profit 5416489771,4721,1931,0591,0611,0501,0881,141
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