Switch to:
Mitcham Industries Inc (NAS:MIND)
Gross Margin
-3.12% (As of Apr. 2016)

Gross Margin is calculated as gross profit divided by its revenue. Mitcham Industries Inc's gross profit for the three months ended in Apr. 2016 was $-0.37 Mil. Mitcham Industries Inc's revenue for the three months ended in Apr. 2016 was $11.73 Mil. Therefore, Mitcham Industries Inc's Gross Margin for the quarter that ended in Apr. 2016 was -3.12%.

Warning Sign:

Mitcham Industries Inc gross margin has been in long term decline. The average rate of decline per year is -28.5%.

MIND' s Gross Margin Range Over the Past 10 Years
Min: 5.15   Max: 51.18
Current: -4.9

5.15
51.18

During the past 13 years, the highest Gross Margin of Mitcham Industries Inc was 51.18%. The lowest was 5.15%. And the median was 36.54%.

MIND's Gross Margin is ranked lower than
97% of the 2241 Companies
in the Global Scientific & Technical Instruments industry.

( Industry Median: 23.01 vs. MIND: -4.90 )

Mitcham Industries Inc had a gross margin of -3.12% for the quarter that ended in Apr. 2016 => No sustainable competitive advantage

The 5-Year average Growth Rate of Gross Margin for Mitcham Industries Inc was -28.50% per year.


Definition

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

Mitcham Industries Inc's Gross Margin for the fiscal year that ended in Jan. 2016 is calculated as

Gross Margin (A: Jan. 2016 )=Gross Profit (A: Jan. 2016 ) / Revenue (A: Jan. 2016 )
=2.7 / 51.819
=(Revenue - Cost of Goods Sold) / Revenue
=(51.819 - 49.15) / 51.819
=5.15 %

Mitcham Industries Inc's Gross Margin for the quarter that ended in Apr. 2016 is calculated as

Gross Margin (Q: Apr. 2016 )=Gross Profit (Q: Apr. 2016 ) / Revenue (Q: Apr. 2016 )
=-0.4 / 11.731
=(Revenue - Cost of Goods Sold) / Revenue
=(11.731 - 12.097) / 11.731
=-3.12 %

* 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

Mitcham Industries Inc had a gross margin of -3.12% for the quarter that ended in Apr. 2016 => 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.

Mitcham Industries Inc Annual Data

Jan07Jan08Jan09Jan10Jan11Jan12Jan13Jan14Jan15Jan16
Gross Margin 47.1946.8548.8632.8537.3351.1835.7434.7627.975.15

Mitcham Industries Inc Quarterly Data

Jan14Apr14Jul14Oct14Jan15Apr15Jul15Oct15Jan16Apr16
Gross Margin 34.5343.6916.5630.5911.8126.69-34.5410.99-8.92-3.12
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)
FEEDBACK