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Viacom Inc (NAS:VIAB)
Gross Margin
49.31% (As of Jun. 2016)

Gross Margin is calculated as gross profit divided by its revenue. Viacom Inc's gross profit for the three months ended in Jun. 2016 was $1,532 Mil. Viacom Inc's revenue for the three months ended in Jun. 2016 was $3,107 Mil. Therefore, Viacom Inc's Gross Margin for the quarter that ended in Jun. 2016 was 49.31%.

VIAB' s Gross Margin Range Over the Past 10 Years
Min: 39.92   Max: 52.54
Current: 48.21

39.92
52.54

During the past 13 years, the highest Gross Margin of Viacom Inc was 52.54%. The lowest was 39.92%. And the median was 47.75%.

VIAB's Gross Margin is ranked higher than
56% of the 416 Companies
in the Global Media - Diversified industry.

( Industry Median: 43.65 vs. VIAB: 48.21 )

Viacom Inc had a gross margin of 49.31% for the quarter that ended in Jun. 2016 => Durable competitive advantage

The 5-Year average Growth Rate of Gross Margin for Viacom Inc was 1.10% per year.


Definition

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

Viacom Inc's Gross Margin for the fiscal year that ended in Sep. 2015 is calculated as

Gross Margin (A: Sep. 2015 )=Gross Profit (A: Sep. 2015 ) / Revenue (A: Sep. 2015 )
=6400 / 13268
=(Revenue - Cost of Goods Sold) / Revenue
=(13268 - 6868) / 13268
=48.24 %

Viacom Inc's Gross Margin for the quarter that ended in Jun. 2016 is calculated as

Gross Margin (Q: Jun. 2016 )=Gross Profit (Q: Jun. 2016 ) / Revenue (Q: Jun. 2016 )
=1532 / 3107
=(Revenue - Cost of Goods Sold) / Revenue
=(3107 - 1575) / 3107
=49.31 %

* 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

Viacom Inc had a gross margin of 49.31% for the quarter that ended in Jun. 2016 => 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.

Viacom Inc Annual Data

Dec06Dec07Dec08Dec09Sep10Sep11Sep12Sep13Sep14Sep15
Gross Margin 47.5144.6439.9244.2947.9847.2449.6450.7152.5448.24

Viacom Inc Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
Gross Margin 51.5454.2550.7651.4733.2059.0648.8649.4944.8949.31
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