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GuruFocus has detected 3 Warning Signs with Coca-Cola Femsa SAB de CV $KOF.
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Coca-Cola Femsa SAB de CV (NYSE:KOF)
Gross Profit
$4,345 Mil (TTM As of Mar. 2017)

Coca-Cola Femsa SAB de CV's gross profit for the three months ended in Mar. 2017 was $1,156 Mil. Coca-Cola Femsa SAB de CV's gross profit for the trailing twelve months (TTM) ended in Mar. 2017 was $4,345 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Coca-Cola Femsa SAB de CV's gross profit for the three months ended in Mar. 2017 was $1,156 Mil. Coca-Cola Femsa SAB de CV's revenue for the three months ended in Mar. 2017 was $2,664 Mil. Therefore, Coca-Cola Femsa SAB de CV's Gross Margin for the quarter that ended in Mar. 2017 was 43.42%.

Coca-Cola Femsa SAB de CV had a gross margin of 43.42% for the quarter that ended in Mar. 2017 => Durable competitive advantage

During the past 13 years, the highest Gross Margin of Coca-Cola Femsa SAB de CV was 48.19%. The lowest was 44.36%. And the median was 46.49%.


Definition

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

Coca-Cola Femsa SAB de CV'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
=8669.50905401 - 4783.4061817
=3,886

Coca-Cola Femsa SAB de CV's Gross Profit for the quarter that ended in Mar. 2017 is calculated as

Gross Profit (Q: Mar. 2017 )=Revenue - Cost of Goods Sold
=2663.74481328 - 1507.26141079
=1,156

Coca-Cola Femsa SAB de CV Gross Profit for the trailing twelve months (TTM) ended in Mar. 2017 was 988.752961863 (Jun. 2016 ) + 980.949510487 (Sep. 2016 ) + 1218.77926943 (Dec. 2016 ) + 1156.48340249 (Mar. 2017 ) = $4,345 Mil.

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

Coca-Cola Femsa SAB de CV'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
=1,156 / 2663.74481328
=43.42 %

* 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

Coca-Cola Femsa SAB de CV had a gross margin of 43.42% 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.

Coca-Cola Femsa SAB de CV Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
Gross_Profit 3,0772,9133,7173,8684,1045,3355,6064,7094,2203,886

Coca-Cola Femsa SAB de CV Quarterly Data

Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16Mar17
Gross_Profit 7401,0341,1301,0651,1949599899811,2191,156
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