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Keurig Green Mountain Inc  (NAS:GMCR) Gross Profit: $1,503 Mil (TTM As of Dec. 2015)

Keurig Green Mountain Inc's gross profit for the three months ended in Dec. 2015 was $360 Mil. Keurig Green Mountain Inc's gross profit for the trailing twelve months (TTM) ended in Dec. 2015 was $1,503 Mil.

Gross Margin % is calculated as gross profit divided by its revenue. Keurig Green Mountain Inc's gross profit for the three months ended in Dec. 2015 was $360 Mil. Keurig Green Mountain Inc's Revenue for the three months ended in Dec. 2015 was $1,258 Mil. Therefore, Keurig Green Mountain Inc's Gross Margin % for the quarter that ended in Dec. 2015 was 28.61%.

Keurig Green Mountain Inc had a gross margin of 28.61% for the quarter that ended in Dec. 2015 => Competition eroding margins


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.

Keurig Green Mountain Inc Annual Data

Sep06 Sep07 Sep08 Sep09 Sep10 Sep11 Sep12 Sep13 Sep14 Sep15
Gross Profit Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 904.63 1,269.40 1,619.39 1,815.86 1,607.52

Keurig Green Mountain Inc Quarterly Data

Mar11 Jun11 Sep11 Dec11 Mar12 Jun12 Sep12 Dec12 Mar13 Jun13 Sep13 Dec13 Mar14 Jun14 Sep14 Dec14 Mar15 Jun15 Sep15 Dec15
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 464.12 458.81 349.26 335.33 360.00

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.

Keurig Green Mountain Inc's Gross Profit for the fiscal year that ended in Sep. 2015 is calculated as

Gross Profit (A: Sep. 2015 )=Revenue - Cost of Goods Sold
=4520.031 - 2912.507
=1,608

Keurig Green Mountain Inc's Gross Profit for the quarter that ended in Dec. 2015 is calculated as

Gross Profit (Q: Dec. 2015 )=Revenue - Cost of Goods Sold
=1258.421 - 898.424
=360

Gross Profit for the trailing twelve months (TTM) ended in Dec. 2015 was 458.808 (Mar. 2015 ) + 349.26 (Jun. 2015 ) + 335.334 (Sep. 2015 ) + 359.997 (Dec. 2015 ) = $1,503 Mil.

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

Keurig Green Mountain Inc's Gross Margin % for the quarter that ended in Dec. 2015 is calculated as

Gross Margin % (Q: Dec. 2015 )=Gross Profit (Q: Dec. 2015 ) / Revenue (Q: Dec. 2015 )
=(Revenue - Cost of Goods Sold) / Revenue
=360 / 1258.421
=28.61 %

* 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

Keurig Green Mountain Inc had a gross margin of 28.61% for the quarter that ended in Dec. 2015 => Competition eroding margins


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