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Poseidon Concepts Corp (TSX:PSN)
Gross Margin
77.94% (As of Sep. 2012)

Gross Margin is calculated as gross profit divided by its revenue. Poseidon Concepts Corp's gross profit for the three months ended in Sep. 2012 was C$32.05 Mil. Poseidon Concepts Corp's revenue for the three months ended in Sep. 2012 was C$41.12 Mil. Therefore, Poseidon Concepts Corp's Gross Margin for the quarter that ended in Sep. 2012 was 77.94%.

TSX:PSN' s 10-Year Gross Margin Range
Min: 0   Max: 0
Current: 0

TSX:PSN's Gross Marginis ranked lower than
100% of the Companies
in the Global Oil & Gas Equipment & Services industry.

( Industry Median: vs. TSX:PSN: 0.00 )

Poseidon Concepts Corp had a gross margin of 77.94% for the quarter that ended in Sep. 2012 => Durable competitive advantage

The 3-Year average Growth Rate of Gross Margin for Poseidon Concepts Corp was 0.00% per year.


Definition

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

Poseidon Concepts Corp's Gross Margin for the fiscal year that ended in Dec. 2011 is calculated as

Gross Margin (A: Dec. 2011 )=Gross Profit (A: Dec. 2011 ) / Revenue (A: Dec. 2011 )
=69.1 / 78.767
=(Revenue - Cost of Goods Sold) / Revenue
=(78.767 - 9.623) / 78.767
=87.78 %

Poseidon Concepts Corp's Gross Margin for the quarter that ended in Sep. 2012 is calculated as

Gross Margin (Q: Sep. 2012 )=Gross Profit (Q: Sep. 2012 ) / Revenue (Q: Sep. 2012 )
=32 / 41.116
=(Revenue - Cost of Goods Sold) / Revenue
=(41.116 - 9.069) / 41.116
=77.94 %

* 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

Poseidon Concepts Corp had a gross margin of 77.94% for the quarter that ended in Sep. 2012 => 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.

Poseidon Concepts Corp Annual Data

Dec07Dec08Dec09Dec10Dec11
Gross Margin 0.000.000.000.000.0074.4966.7968.5088.9087.78

Poseidon Concepts Corp Quarterly Data

Jun10Sep10Dec10Mar11Jun11Sep11Dec11Mar12Jun12Sep12
Gross Margin 71.1775.3470.9982.9881.7688.9190.3190.9793.9377.94
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