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Electro Rent Corp  (NAS:ELRC) Gross Profit: $129.3 Mil (TTM As of Feb. 2016)

Electro Rent Corp's gross profit for the three months ended in Feb. 2016 was $28.9 Mil. Electro Rent Corp's gross profit for the trailing twelve months (TTM) ended in Feb. 2016 was $129.3 Mil.

Gross Margin % is calculated as gross profit divided by its revenue. Electro Rent Corp's gross profit for the three months ended in Feb. 2016 was $28.9 Mil. Electro Rent Corp's Revenue for the three months ended in Feb. 2016 was $39.5 Mil. Therefore, Electro Rent Corp's Gross Margin % for the quarter that ended in Feb. 2016 was 73.21%.

Electro Rent Corp had a gross margin of 73.21% for the quarter that ended in Feb. 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.

Electro Rent Corp Annual Data

May06 May07 May08 May09 May10 May11 May12 May13 May14 May15
Gross Profit Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 132.07 142.99 150.05 148.09 138.69

Electro Rent Corp Quarterly Data

May11 Aug11 Nov11 Feb12 May12 Aug12 Nov12 Feb13 May13 Aug13 Nov13 Feb14 May14 Aug14 Nov14 Feb15 May15 Aug15 Nov15 Feb16
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 32.20 34.60 33.57 32.22 28.92

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.

Electro Rent Corp's Gross Profit for the fiscal year that ended in May. 2015 is calculated as

Gross Profit (A: May. 2015 )=Revenue - Cost of Goods Sold
=238.329 - 99.643
=138.7

Electro Rent Corp's Gross Profit for the quarter that ended in Feb. 2016 is calculated as

Gross Profit (Q: Feb. 2016 )=Revenue - Cost of Goods Sold
=39.498 - 10.582
=28.9

Gross Profit for the trailing twelve months (TTM) ended in Feb. 2016 was 34.596 (May. 2015 ) + 33.565 (Aug. 2015 ) + 32.221 (Nov. 2015 ) + 28.916 (Feb. 2016 ) = $129.3 Mil.

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

Electro Rent Corp's Gross Margin % for the quarter that ended in Feb. 2016 is calculated as

Gross Margin % (Q: Feb. 2016 )=Gross Profit (Q: Feb. 2016 ) / Revenue (Q: Feb. 2016 )
=(Revenue - Cost of Goods Sold) / Revenue
=28.9 / 39.498
=73.21 %

* 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

Electro Rent Corp had a gross margin of 73.21% for the quarter that ended in Feb. 2016 => Durable competitive advantage


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