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Apollo Education Group Inc (NAS:APOL)
Gross Margin
50.81% (As of May. 2016)

Gross Margin is calculated as gross profit divided by its revenue. Apollo Education Group Inc's gross profit for the three months ended in May. 2016 was $284 Mil. Apollo Education Group Inc's revenue for the three months ended in May. 2016 was $558 Mil. Therefore, Apollo Education Group Inc's Gross Margin for the quarter that ended in May. 2016 was 50.81%.

Warning Sign:

Apollo Education Group Inc gross margin has been in long term decline. The average rate of decline per year is -3.6%.

APOL' s Gross Margin Range Over the Past 10 Years
Min: 48.56   Max: 64.82
Current: 48.56

48.56
64.82

During the past 13 years, the highest Gross Margin of Apollo Education Group Inc was 64.82%. The lowest was 48.56%. And the median was 57.24%.

APOL's Gross Margin is ranked lower than
60% of the 154 Companies
in the Global Education & Training Services industry.

( Industry Median: 56.22 vs. APOL: 48.56 )

Apollo Education Group Inc had a gross margin of 50.81% for the quarter that ended in May. 2016 => Durable competitive advantage

The 5-Year average Growth Rate of Gross Margin for Apollo Education Group Inc was -3.60% per year.


Definition

Gross Margin is the percentage of Gross Profit out of sales or Revenue.

Apollo Education Group Inc's Gross Margin for the fiscal year that ended in Aug. 2015 is calculated as

Gross Margin (A: Aug. 2015 )=Gross Profit (A: Aug. 2015 ) / Revenue (A: Aug. 2015 )
=1358.7 / 2566.277
=(Revenue - Cost of Goods Sold) / Revenue
=(2566.277 - 1207.535) / 2566.277
=52.95 %

Apollo Education Group Inc's Gross Margin for the quarter that ended in May. 2016 is calculated as

Gross Margin (Q: May. 2016 )=Gross Profit (Q: May. 2016 ) / Revenue (Q: May. 2016 )
=283.5 / 558.002
=(Revenue - Cost of Goods Sold) / Revenue
=(558.002 - 274.486) / 558.002
=50.81 %

* 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

Apollo Education Group Inc had a gross margin of 50.81% for the quarter that ended in May. 2016 => Durable competitive advantage


Be Aware

If a company loses its competitive advantages, usually its gross margin declines well before its sales declines. Watching Gross Margin and Operating Margin closely helps avoid value trap situations.


Related Terms

Operating Margin, Cost of Goods Sold, Gross Profit, Revenue


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Apollo Education Group Inc Annual Data

Aug06Aug07Aug08Aug09Aug10Aug11Aug12Aug13Aug14Aug15
Gross Margin 55.2154.5756.3560.3564.8262.6457.6357.2957.1852.95

Apollo Education Group Inc Quarterly Data

Feb14May14Aug14Nov14Feb15May15Aug15Nov15Feb16May16
Gross Margin 52.9459.1055.3354.9949.4156.4149.9950.2941.8450.81
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