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China Yuchai International Ltd (NYSE:CYD)
Gross Margin
23.65% (As of Dec. 2015)

Gross Margin is calculated as gross profit divided by its revenue. China Yuchai International Ltd's gross profit for the three months ended in Dec. 2015 was $107 Mil. China Yuchai International Ltd's revenue for the three months ended in Dec. 2015 was $454 Mil. Therefore, China Yuchai International Ltd's Gross Margin for the quarter that ended in Dec. 2015 was 23.65%.

Warning Sign:

China Yuchai International Ltd gross margin has been in long term decline. The average rate of decline per year is -3.8%.

CYD' s Gross Margin Range Over the Past 10 Years
Min: 17.55   Max: 24.73
Current: 20.3

17.55
24.73

During the past 13 years, the highest Gross Margin of China Yuchai International Ltd was 24.73%. The lowest was 17.55%. And the median was 20.34%.

CYD's Gross Margin is ranked lower than
72% of the 1752 Companies
in the Global Diversified Industrials industry.

( Industry Median: 27.99 vs. CYD: 20.30 )

China Yuchai International Ltd had a gross margin of 23.65% for the quarter that ended in Dec. 2015 => Competition eroding margins

The 5-Year average Growth Rate of Gross Margin for China Yuchai International Ltd was -3.80% per year.


Definition

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

China Yuchai International Ltd'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 )
=432.7 / 2129.51217999
=(Revenue - Cost of Goods Sold) / Revenue
=(2129.51217999 - 1696.80498054) / 2129.51217999
=20.32 %

China Yuchai International Ltd's Gross Margin for the quarter that ended in Dec. 2015 is calculated as

Gross Margin (Q: Dec. 2015 )=Gross Profit (Q: Dec. 2015 ) / Revenue (Q: Dec. 2015 )
=107.3 / 453.776651006
=(Revenue - Cost of Goods Sold) / Revenue
=(453.776651006 - 346.453148501) / 453.776651006
=23.65 %

* 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

China Yuchai International Ltd had a gross margin of 23.65% for the quarter that ended in Dec. 2015 => 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.

China Yuchai International Ltd Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
Gross Margin 18.3820.3517.5519.3224.7322.2921.4120.5320.0220.32

China Yuchai International Ltd Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
Gross Margin 20.0023.3117.3219.3919.0724.7418.3320.3119.5323.65
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