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GuruFocus has detected 2 Warning Signs with Newfield Exploration Co \$NFX.
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Newfield Exploration Co (NYSE:NFX)
COGS-to-Revenue
0.34 (As of Dec. 2016)

Newfield Exploration Co's cost of goods sold for the three months ended in Dec. 2016 was \$141 Mil. Its revenue for the three months ended in Dec. 2016 was \$415 Mil.

Newfield Exploration Co's COGS to Revenue for the three months ended in Dec. 2016 was 0.34.

Cost of Goods Sold is directly linked to profitability of the company through Gross Margin. Newfield Exploration Co's Gross Margin for the three months ended in Dec. 2016 was 66.02%.

Definition

Newfield Exploration Co's COGS to Revenue for the fiscal year that ended in Dec. 2016 is calculated as

 COGS to Revenue = Cost of Goods Sold / Revenue = 558 / 1472 = 0.38

Newfield Exploration Co's COGS to Revenue for the quarter that ended in Dec. 2016 is calculated as

 COGS to Revenue = Cost of Goods Sold / Revenue = 141 / 415 = 0.34

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Explanation

Cost of Goods Sold is directly linked to profitability of the company through Gross Margin.

Newfield Exploration Co's Gross Margin for the three months ended in Dec. 2016 is calculated as:

 Gross Margin = 1 - COGS to Revenue = 1 - Cost of Goods Sold / Revenue = 1 - 141 / 415 = 66.02 %

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

A company that has a moat can usually maintain or even expand their Gross Margin. A company can increase its Gross Margin in two ways. It can increase the prices of the goods it sells and keeps its Cost of Goods Sold unchanged. Or it can keep the sales price unchanged and squeeze its suppliers to reduce the Cost of Goods Sold. Warren Buffett believes businesses with the power to raise prices have moats.

Related Terms

Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Newfield Exploration Co Annual Data

 Dec07 Dec08 Dec09 Dec10 Dec11 Dec12 Dec13 Dec14 Dec15 Dec16 cogs2rev 0.00 0.00 0.00 0.00 0.24 0.26 0.26 0.26 0.35 0.38

Newfield Exploration Co Quarterly Data

 Sep14 Dec14 Mar15 Jun15 Sep15 Dec15 Mar16 Jun16 Sep16 Dec16 cogs2rev 0.20 0.49 0.39 0.30 0.36 0.35 0.47 0.36 0.37 0.34
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