Switch to:
Majesco Entertainment Company (NAS:COOL)
Gross Margin
15.45% (As of Jan. 2014)

Gross Margin is calculated as gross profit divided by its revenue. Majesco Entertainment Company's gross profit for the three months ended in Jan. 2014 was $3.39 Mil. Majesco Entertainment Company's revenue for the three months ended in Jan. 2014 was $21.93 Mil. Therefore, Majesco Entertainment Company's Gross Margin for the quarter that ended in Jan. 2014 was 15.45%.

Warning Sign:

Majesco Entertainment Company gross margin has been in long term decline. The average rate of decline per year is -1.1%.

COOL' s 10-Year Gross Margin Range
Min: -2.32   Max: 100
Current: 25.74

-2.32
100

During the past 13 years, the highest Gross Margin of Majesco Entertainment Company was 100.00%. The lowest was -2.32%. And the median was 32.89%.

COOL's Gross Marginis ranked lower than
100% of the Companies
in the Global Electronic Gaming & Multimedia industry.

( Industry Median: vs. COOL: 25.74 )

Majesco Entertainment Company had a gross margin of 15.45% for the quarter that ended in Jan. 2014 => No sustainable competitive advantage

The 3-Year average Growth Rate of Gross Margin for Majesco Entertainment Company was -1.10% per year.


Definition

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

Majesco Entertainment Company's Gross Margin for the fiscal year that ended in Oct. 2013 is calculated as

Gross Margin (A: Oct. 2013 )=Gross Profit (A: Oct. 2013 ) / Revenue (A: Oct. 2013 )
=12.2 / 47.267
=(Revenue - Cost of Goods Sold) / Revenue
=(47.267 - 35.099) / 47.267
=25.74 %

Majesco Entertainment Company's Gross Margin for the quarter that ended in Jan. 2014 is calculated as

Gross Margin (Q: Jan. 2014 )=Gross Profit (Q: Jan. 2014 ) / Revenue (Q: Jan. 2014 )
=3.4 / 21.934
=(Revenue - Cost of Goods Sold) / Revenue
=(21.934 - 18.545) / 21.934
=15.45 %

* 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

Majesco Entertainment Company had a gross margin of 15.45% for the quarter that ended in Jan. 2014 => No sustainable 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.

Majesco Entertainment Company Annual Data

Oct04Oct05Oct06Oct07Oct08Oct09Oct10Oct11Oct12Oct13
Gross Margin 28.72-2.3229.7333.9136.1424.2524.3036.3032.8925.74

Majesco Entertainment Company Quarterly Data

Oct11Jan12Apr12Jul12Oct12Jan13Apr13Jul13Oct13Jan14
Gross Margin 16.8634.7740.0438.4518.1230.4731.2230.897.4015.45
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Free 7-day Trial
FEEDBACK
Hide