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Walt Disney Co (NYSE:DIS)
Gross Margin
28.06% (As of Jun. 2014)

Gross Margin is calculated as gross profit divided by its revenue. Walt Disney Co's gross profit for the three months ended in Jun. 2014 was $3,498 Mil. Walt Disney Co's revenue for the three months ended in Jun. 2014 was $12,466 Mil. Therefore, Walt Disney Co's Gross Margin for the quarter that ended in Jun. 2014 was 28.06%.

DIS' s 10-Year Gross Margin Range
Min: 9.5   Max: 41.25
Current: 20.98

9.5
41.25

During the past 13 years, the highest Gross Margin of Walt Disney Co was 41.25%. The lowest was 9.50%. And the median was 19.10%.

DIS's Gross Marginis ranked lower than
100% of the Companies
in the Global Media - Diversified industry.

( Industry Median: vs. DIS: 20.98 )

Walt Disney Co had a gross margin of 28.06% for the quarter that ended in Jun. 2014 => Competition eroding margins

The 3-Year average Growth Rate of Gross Margin for Walt Disney Co was 3.70% per year.


Definition

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

Walt Disney Co's Gross Margin for the fiscal year that ended in Sep. 2013 is calculated as

Gross Margin (A: Sep. 2013 )=Gross Profit (A: Sep. 2013 ) / Revenue (A: Sep. 2013 )
=9450 / 45041
=(Revenue - Cost of Goods Sold) / Revenue
=(45041 - 35591) / 45041
=20.98 %

Walt Disney Co's Gross Margin for the quarter that ended in Jun. 2014 is calculated as

Gross Margin (Q: Jun. 2014 )=Gross Profit (Q: Jun. 2014 ) / Revenue (Q: Jun. 2014 )
=3498 / 12466
=(Revenue - Cost of Goods Sold) / Revenue
=(12466 - 8968) / 12466
=28.06 %

* 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

Walt Disney Co had a gross margin of 28.06% for the quarter that ended in Jun. 2014 => 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.

Walt Disney Co Annual Data

Sep04Sep05Sep06Sep07Sep08Sep09Sep10Sep11Sep12Sep13
Gross Margin 13.1612.8615.9819.1019.5715.7617.6719.0320.9620.98

Walt Disney Co Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
Gross Margin 17.5226.7018.7718.4520.8025.9518.6621.6525.5928.06
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