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GuruFocus has detected 8 Warning Signs with Apartment Investment & Management Co $AIV.
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Apartment Investment & Management Co (NYSE:AIV)
Gross Profit
$639.6 Mil (TTM As of Mar. 2017)

Apartment Investment & Management Co's gross profit for the three months ended in Mar. 2017 was $157.4 Mil. Apartment Investment & Management Co's gross profit for the trailing twelve months (TTM) ended in Mar. 2017 was $639.6 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Apartment Investment & Management Co's gross profit for the three months ended in Mar. 2017 was $157.4 Mil. Apartment Investment & Management Co's revenue for the three months ended in Mar. 2017 was $246.5 Mil. Therefore, Apartment Investment & Management Co's Gross Margin for the quarter that ended in Mar. 2017 was 63.85%.

Apartment Investment & Management Co had a gross margin of 63.85% for the quarter that ended in Mar. 2017 => Durable competitive advantage

During the past 13 years, the highest Gross Margin of Apartment Investment & Management Co was 98.03%. The lowest was 53.80%. And the median was 60.34%.


Definition

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

Apartment Investment & Management Co's Gross Profit for the fiscal year that ended in Dec. 2016 is calculated as

Gross Profit (A: Dec. 2016 )=Revenue - Cost of Goods Sold
=995.854 - 356.76
=639.1

Apartment Investment & Management Co's Gross Profit for the quarter that ended in Mar. 2017 is calculated as

Gross Profit (Q: Mar. 2017 )=Revenue - Cost of Goods Sold
=246.481 - 89.104
=157.4

Apartment Investment & Management Co Gross Profit for the trailing twelve months (TTM) ended in Mar. 2017 was 161.896 (Jun. 2016 ) + 156.443 (Sep. 2016 ) + 163.888 (Dec. 2016 ) + 157.377 (Mar. 2017 ) = $639.6 Mil.

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

Apartment Investment & Management Co's Gross Margin for the quarter that ended in Mar. 2017 is calculated as

Gross Margin (Q: Mar. 2017 )=Gross Profit (Q: Mar. 2017 ) / Revenue (Q: Mar. 2017 )
=(Revenue - Cost of Goods Sold) / Revenue
=157.4 / 246.481
=63.85 %

* 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

Apartment Investment & Management Co had a gross margin of 63.85% for the quarter that ended in Mar. 2017 => Durable competitive advantage


Related Terms

Cost of Goods Sold, Gross Margin, Revenue


Historical Data

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

Apartment Investment & Management Co Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
Gross_Profit 1,349.6686.8608.5528.6527.7572.2594.0603.4616.1639.1

Apartment Investment & Management Co Quarterly Data

Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16Mar17
Gross_Profit 153.8147.2155.8155.9157.3156.9161.9156.4163.9157.4
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