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Gross Margin % is calculated as gross profit divided by its revenue. Health Net's Gross Profit for the three months ended in Dec. 2015 was $654 Mil. Health Net's Revenue for the three months ended in Dec. 2015 was $4,036 Mil. Therefore, Health Net's Gross Margin % for the quarter that ended in Dec. 2015 was 16.21%.
The historical rank and industry rank for Health Net's Gross Margin % or its related term are showing as below:
Health Net had a gross margin of 16.21% for the quarter that ended in Dec. 2015 => No sustainable competitive advantage
The 5-Year average Growth Rate of Gross Margin for Health Net was 0.00% per year.
The historical data trend for Health Net's Gross Margin % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Health Net Annual Data | |||||||||||||||||||||
Trend | Dec06 | Dec07 | Dec08 | Dec09 | Dec10 | Dec11 | Dec12 | Dec13 | Dec14 | Dec15 | |||||||||||
Gross Margin % | Get a 7-Day Free Trial | 14.35 | 12.12 | 15.06 | 15.45 | 16.00 |
Health Net Quarterly Data | ||||||||||||||||||||
Mar11 | Jun11 | Sep11 | Dec11 | Mar12 | Jun12 | Sep12 | Dec12 | Mar13 | Jun13 | Sep13 | Dec13 | Mar14 | Jun14 | Sep14 | Dec14 | Mar15 | Jun15 | Sep15 | Dec15 | |
Gross Margin % | Get a 7-Day Free Trial | 15.25 | 15.54 | 15.91 | 16.30 | 16.21 |
For the Healthcare Plans subindustry, Health Net's Gross Margin %, along with its competitors' market caps and Gross Margin % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
For the Healthcare Plans industry and Healthcare sector, Health Net's Gross Margin % distribution charts can be found below:
* The bar in red indicates where Health Net's Gross Margin % falls into.
Gross Margin is the percentage of Gross Profit out of sales or Revenue.
Health Net'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 ) |
= | 2598.7 | / | 16243.587 | |
= | (Revenue - Cost of Goods Sold) | / | Revenue | |
= | (16243.587 - 13644.877) | / | 16243.587 | |
= | 16.00 % |
Health Net'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 ) |
= | 654.5 | / | 4036.401 | |
= | (Revenue - Cost of Goods Sold) | / | Revenue | |
= | (4036.401 - 3381.931) | / | 4036.401 | |
= | 16.21 % |
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange 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.
Health Net (NYSE:HNT) Gross Margin % 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
Health Net had a gross margin of 16.21% for the quarter that ended in Dec. 2015 => 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.
Thank you for viewing the detailed overview of Health Net's Gross Margin % provided by GuruFocus.com. Please click on the following links to see related term pages.
Mary Anne Citrino | director | 345 PARK AVENUE, 29TH FLOOR, NEW YORK NY 10154 |
Craver Theodore F Jr | director | DUKE ENERGY CORPORATION, 550 SOUTH TRYON STREET - DEC45A, CHARLOTTE NC 28202 |
Kathleen Alyce Waters | officer: SVP, Gen. Counsel & Secretary | C/O DAVITA INC., 2000 16TH STREET, DENVER CO 80202 |
Jay M Gellert | director, officer: President, CEO | 6520 PLATT AVENUE, #695, WEST HILL CA 91307 |
Gale S Fitzgerald | director | 800 DELEWARE AVE, COMPUTER TASK GROUP INC, BUFFALO NY 14209 |
James Woys | officer: EVP, CFO and COO | 21650 OXNARD STREET, 22ND FLOOR, WOODLAND HILLS CA 91367 |
Patrick Foley | director | C/O GLENBOROUGH REALTY TRUST, 400 SOUTH EL CAMINO REAL, SAN MATEO CA 94402 |
Steven H Nelson | officer: President Health Net of the NE | 21650 OXNARD STREET, WOODLAND HILLS CA 91367 |
Anthony S Piszel | officer: EVP & Chief Financial Officer | C/O PRUDENTIAL FINANCIAL INC, 751 BROAD ST 4TH FL, NEWARK NJ 07102 |
Maurice Hebert | officer: Corporate Controller | C/O WELLCARE HEALTH PLANS, INC., 8735 HENDERSON ROAD, TAMPA FL 33634 |
Richard W Hanselman | director | 21650 OXNARD STREET, 22ND FLOOR, WOODLAND HILLS CA 91367 |
J Thomas Bouchard | director | 5301 N IRONWOOD RD, MILWAUKEE WI 53217 |
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