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GuruFocus has detected 5 Warning Signs with Jack Henry & Associates Inc $JKHY.
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Jack Henry & Associates Inc (NAS:JKHY)
Gross Profit
$609 Mil (TTM As of Mar. 2017)

Jack Henry & Associates Inc's gross profit for the three months ended in Mar. 2017 was $147 Mil. Jack Henry & Associates Inc's gross profit for the trailing twelve months (TTM) ended in Mar. 2017 was $609 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Jack Henry & Associates Inc's gross profit for the three months ended in Mar. 2017 was $147 Mil. Jack Henry & Associates Inc's revenue for the three months ended in Mar. 2017 was $354 Mil. Therefore, Jack Henry & Associates Inc's Gross Margin for the quarter that ended in Mar. 2017 was 41.56%.

Jack Henry & Associates Inc had a gross margin of 41.56% for the quarter that ended in Mar. 2017 => Durable competitive advantage

During the past 13 years, the highest Gross Margin of Jack Henry & Associates Inc was 43.09%. The lowest was 40.16%. And the median was 41.51%.


Definition

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

Jack Henry & Associates Inc's Gross Profit for the fiscal year that ended in Jun. 2016 is calculated as

Gross Profit (A: Jun. 2016 )=Revenue - Cost of Goods Sold
=1354.646 - 773.651
=581

Jack Henry & Associates Inc's Gross Profit for the quarter that ended in Mar. 2017 is calculated as

Gross Profit (Q: Mar. 2017 )=Revenue - Cost of Goods Sold
=353.767 - 206.727
=147

Jack Henry & Associates Inc Gross Profit for the trailing twelve months (TTM) ended in Mar. 2017 was 161.7 (Jun. 2016 ) + 150.265 (Sep. 2016 ) + 150.407 (Dec. 2016 ) + 147.04 (Mar. 2017 ) = $609 Mil.

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

Jack Henry & Associates Inc'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
=147 / 353.767
=41.56 %

* 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

Jack Henry & Associates Inc had a gross margin of 41.56% 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.

Jack Henry & Associates Inc Annual Data

Jun07Jun08Jun09Jun10Jun11Jun12Jun13Jun14Jun15Jun16
Gross_Profit 286307299345399419461494536581

Jack Henry & Associates Inc Quarterly Data

Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16Mar17
Gross_Profit 131132146138142139162150150147
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