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John Wiley & Sons Inc (NYSE:JW.A)
Gross Margin
71.67% (As of Jul. 2014)

Gross Margin is calculated as gross profit divided by its revenue. John Wiley & Sons Inc's gross profit for the three months ended in Jul. 2014 was $314 Mil. John Wiley & Sons Inc's revenue for the three months ended in Jul. 2014 was $438 Mil. Therefore, John Wiley & Sons Inc's Gross Margin for the quarter that ended in Jul. 2014 was 71.67%.

JW.A' s 10-Year Gross Margin Range
Min: 65.91   Max: 72.79
Current: 71.64

65.91
72.79

During the past 13 years, the highest Gross Margin of John Wiley & Sons Inc was 72.79%. The lowest was 65.91%. And the median was 68.76%.

JW.A's Gross Marginis ranked lower than
100% of the Companies
in the Global Publishing industry.

( Industry Median: vs. JW.A: 71.64 )

John Wiley & Sons Inc had a gross margin of 71.67% for the quarter that ended in Jul. 2014 => Durable competitive advantage

The 3-Year average Growth Rate of Gross Margin for John Wiley & Sons Inc was 0.90% per year.


Definition

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

John Wiley & Sons Inc's Gross Margin for the fiscal year that ended in Apr. 2014 is calculated as

Gross Margin (A: Apr. 2014 )=Gross Profit (A: Apr. 2014 ) / Revenue (A: Apr. 2014 )
=1268.3 / 1775.195
=(Revenue - Cost of Goods Sold) / Revenue
=(1775.195 - 506.879) / 1775.195
=71.45 %

John Wiley & Sons Inc's Gross Margin for the quarter that ended in Jul. 2014 is calculated as

Gross Margin (Q: Jul. 2014 )=Gross Profit (Q: Jul. 2014 ) / Revenue (Q: Jul. 2014 )
=313.9 / 437.917
=(Revenue - Cost of Goods Sold) / Revenue
=(437.917 - 124.053) / 437.917
=71.67 %

* 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

John Wiley & Sons Inc had a gross margin of 71.67% for the quarter that ended in Jul. 2014 => Durable 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.

John Wiley & Sons Inc Annual Data

Apr05Apr06Apr07Apr08Apr09Apr10Apr11Apr12Apr13Apr14
Gross Margin 66.6367.2265.9168.1667.9568.5769.0769.5269.7771.45

John Wiley & Sons Inc Quarterly Data

Apr12Jul12Oct12Jan13Apr13Jul13Oct13Jan14Apr14Jul14
Gross Margin 69.4469.0269.9969.9970.0370.8670.9871.4972.4071.67
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