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ZBB Energy Corp (AMEX:ZBB)
Gross Margin
86.61% (As of Mar. 2014)

Gross Margin is calculated as gross profit divided by its revenue. ZBB Energy Corp's gross profit for the three months ended in Mar. 2014 was $3.96 Mil. ZBB Energy Corp's revenue for the three months ended in Mar. 2014 was $4.57 Mil. Therefore, ZBB Energy Corp's Gross Margin for the quarter that ended in Mar. 2014 was 86.61%.

ZBB' s 10-Year Gross Margin Range
Min: -82.2   Max: 76.48
Current: 16.77

-82.2
76.48

During the past 9 years, the highest Gross Margin of ZBB Energy Corp was 76.48%. The lowest was -82.20%. And the median was 11.38%.

ZBB's Gross Marginis ranked lower than
100% of the Companies
in the Global Diversified Industrials industry.

( Industry Median: vs. ZBB: 16.77 )

ZBB Energy Corp had a gross margin of 86.61% for the quarter that ended in Mar. 2014 => Durable competitive advantage

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


Definition

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

ZBB Energy Corp's Gross Margin for the fiscal year that ended in Jun. 2013 is calculated as

Gross Margin (A: Jun. 2013 )=Gross Profit (A: Jun. 2013 ) / Revenue (A: Jun. 2013 )
=1.3 / 7.724
=(Revenue - Cost of Goods Sold) / Revenue
=(7.724 - 6.429) / 7.724
=16.77 %

ZBB Energy Corp's Gross Margin for the quarter that ended in Mar. 2014 is calculated as

Gross Margin (Q: Mar. 2014 )=Gross Profit (Q: Mar. 2014 ) / Revenue (Q: Mar. 2014 )
=4 / 4.572
=(Revenue - Cost of Goods Sold) / Revenue
=(4.572 - 0.612) / 4.572
=86.61 %

* 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

ZBB Energy Corp had a gross margin of 86.61% for the quarter that ended in Mar. 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.

ZBB Energy Corp Annual Data

Jun05Jun06Jun07Jun08Jun09Jun10Jun11Jun12Jun13
Gross Margin 0.000.002.415.9976.48-82.20-76.9738.7135.1016.77

ZBB Energy Corp Quarterly Data

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
Gross Margin 57.3722.865.3715.6917.5813.9222.3644.1537.7786.61
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