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Ball Corp (NYSE:BLL)
Gross Margin
21.38% (As of Jun. 2016)

Gross Margin is calculated as gross profit divided by its revenue. Ball Corp's gross profit for the three months ended in Jun. 2016 was $434 Mil. Ball Corp's revenue for the three months ended in Jun. 2016 was $2,030 Mil. Therefore, Ball Corp's Gross Margin for the quarter that ended in Jun. 2016 was 21.38%.

BLL' s Gross Margin Range Over the Past 10 Years
Min: 15.74   Max: 20.18
Current: 20.18

15.74
20.18

During the past 13 years, the highest Gross Margin of Ball Corp was 20.18%. The lowest was 15.74%. And the median was 17.92%.

BLL's Gross Margin is ranked lower than
60% of the 331 Companies
in the Global Packaging & Containers industry.

( Industry Median: 22.32 vs. BLL: 20.18 )

Ball Corp had a gross margin of 21.38% for the quarter that ended in Jun. 2016 => Competition eroding margins

The 5-Year average Growth Rate of Gross Margin for Ball Corp was 1.80% per year.


Definition

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

Ball Corp's Gross Margin for the fiscal year that ended in Dec. 2015 is calculated as

Gross Margin (A: Dec. 2015 )=Gross Profit (A: Dec. 2015 ) / Revenue (A: Dec. 2015 )
=1536.7 / 7997
=(Revenue - Cost of Goods Sold) / Revenue
=(7997 - 6460.3) / 7997
=19.22 %

Ball Corp's Gross Margin for the quarter that ended in Jun. 2016 is calculated as

Gross Margin (Q: Jun. 2016 )=Gross Profit (Q: Jun. 2016 ) / Revenue (Q: Jun. 2016 )
=434 / 2030
=(Revenue - Cost of Goods Sold) / Revenue
=(2030 - 1596) / 2030
=21.38 %

* 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

Ball Corp had a gross margin of 21.38% for the quarter that ended in Jun. 2016 => Competition eroding margins


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.

Ball Corp Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
Gross Margin 16.3315.7416.1517.7718.0317.9617.8818.8119.4519.22

Ball Corp Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
Gross Margin 19.6319.4419.2819.4618.8218.2819.3920.5419.3621.38
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