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Brown-Forman Corp (NYSE:BF.B)
Gross Margin
70.37% (As of Apr. 2016)

Gross Margin is calculated as gross profit divided by its revenue. Brown-Forman Corp's gross profit for the three months ended in Apr. 2016 was $513 Mil. Brown-Forman Corp's revenue for the three months ended in Apr. 2016 was $729 Mil. Therefore, Brown-Forman Corp's Gross Margin for the quarter that ended in Apr. 2016 was 70.37%.

BF.B' s Gross Margin Range Over the Past 10 Years
Min: 49.67   Max: 69.66
Current: 69.4

49.67
69.66

During the past 13 years, the highest Gross Margin of Brown-Forman Corp was 69.66%. The lowest was 49.67%. And the median was 66.72%.

BF.B's Gross Margin is ranked higher than
87% of the 217 Companies
in the Global Beverages - Wineries & Distilleries industry.

( Industry Median: 43.33 vs. BF.B: 69.40 )

Brown-Forman Corp had a gross margin of 70.37% for the quarter that ended in Apr. 2016 => Durable competitive advantage

The 5-Year average Growth Rate of Gross Margin for Brown-Forman Corp was 3.60% per year.


Definition

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

Brown-Forman Corp's Gross Margin for the fiscal year that ended in Apr. 2016 is calculated as

Gross Margin (A: Apr. 2016 )=Gross Profit (A: Apr. 2016 ) / Revenue (A: Apr. 2016 )
=2144 / 3089
=(Revenue - Cost of Goods Sold) / Revenue
=(3089 - 945) / 3089
=69.41 %

Brown-Forman Corp's Gross Margin for the quarter that ended in Apr. 2016 is calculated as

Gross Margin (Q: Apr. 2016 )=Gross Profit (Q: Apr. 2016 ) / Revenue (Q: Apr. 2016 )
=513 / 729
=(Revenue - Cost of Goods Sold) / Revenue
=(729 - 216) / 729
=70.37 %

* 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

Brown-Forman Corp had a gross margin of 70.37% for the quarter that ended in Apr. 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.

Brown-Forman Corp Annual Data

Apr07Apr08Apr09Apr10Apr11Apr12Apr13Apr14Apr15Apr16
Gross Margin 66.7765.6563.5665.2566.6749.6768.6269.4869.6669.41

Brown-Forman Corp Quarterly Data

Jan14Apr14Jul14Oct14Jan15Apr15Jul15Oct15Jan16Apr16
Gross Margin 68.0371.5570.2169.4468.0271.1870.2468.6268.6070.37
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