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American Capital Ltd  (NAS:ACAS) Gross Profit: $571.0 Mil (TTM As of Sep. 2016)

American Capital Ltd's gross profit for the three months ended in Sep. 2016 was $94.0 Mil. American Capital Ltd's gross profit for the trailing twelve months (TTM) ended in Sep. 2016 was $571.0 Mil.

Gross Margin % is calculated as gross profit divided by its revenue. American Capital Ltd's gross profit for the three months ended in Sep. 2016 was $94.0 Mil. American Capital Ltd's Revenue for the three months ended in Sep. 2016 was $94.0 Mil. Therefore, American Capital Ltd's Gross Margin % for the quarter that ended in Sep. 2016 was 100.00%.

American Capital Ltd had a gross margin of 100.00% for the quarter that ended in Sep. 2016 => Durable competitive advantage


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

* Premium members only.

American Capital Ltd Annual Data

Dec06 Dec07 Dec08 Dec09 Dec10 Dec11 Dec12 Dec13 Dec14 Dec15
Gross Profit Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 591.00 0.00 487.00 471.00 671.00

American Capital Ltd Quarterly Data

Dec11 Mar12 Jun12 Sep12 Dec12 Mar13 Jun13 Sep13 Dec13 Mar14 Jun14 Sep14 Dec14 Mar15 Jun15 Sep15 Dec15 Mar16 Jun16 Sep16
Gross Profit Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 176.00 173.00 162.00 142.00 94.00

Competitive Comparison
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap.


Calculation

Gross Profit is the different between the sale prices and the cost of buying or producing the goods.

American Capital Ltd's Gross Profit for the fiscal year that ended in Dec. 2015 is calculated as

Gross Profit (A: Dec. 2015 )=Revenue - Cost of Goods Sold
=671 - 0
=671.0

American Capital Ltd's Gross Profit for the quarter that ended in Sep. 2016 is calculated as

Gross Profit (Q: Sep. 2016 )=Revenue - Cost of Goods Sold
=94 - 0
=94.0

Gross Profit for the trailing twelve months (TTM) ended in Sep. 2016 was 173 (Dec. 2015 ) + 162 (Mar. 2016 ) + 142 (Jun. 2016 ) + 94 (Sep. 2016 ) = $571.0 Mil.

Gross Profit is the numerator in the calculation of Gross Margin:

American Capital Ltd's Gross Margin % for the quarter that ended in Sep. 2016 is calculated as

Gross Margin % (Q: Sep. 2016 )=Gross Profit (Q: Sep. 2016 ) / Revenue (Q: Sep. 2016 )
=(Revenue - Cost of Goods Sold) / Revenue
=94.0 / 94
=100.00 %

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's 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

American Capital Ltd had a gross margin of 100.00% for the quarter that ended in Sep. 2016 => Durable competitive advantage


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