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NGL Energy Partners LP  (NYSE:NGL) Gross Profit: $720 Mil (TTM As of Sep. 2017)

NGL Energy Partners LP's gross profit for the three months ended in Sep. 2017 was $153 Mil. NGL Energy Partners LP's gross profit for the trailing twelve months (TTM) ended in Sep. 2017 was $720 Mil.

Gross Margin % is calculated as gross profit divided by its revenue. NGL Energy Partners LP's gross profit for the three months ended in Sep. 2017 was $153 Mil. NGL Energy Partners LP's Revenue for the three months ended in Sep. 2017 was $3,923 Mil. Therefore, NGL Energy Partners LP's Gross Margin % for the quarter that ended in Sep. 2017 was 3.89%.

NGL Energy Partners LP had a gross margin of 3.89% for the quarter that ended in Sep. 2017 => No sustainable competitive advantage

During the past 9 years, the highest Gross Margin % of NGL Energy Partners LP was 8.57%. The lowest was 3.89%. And the median was 6.47%.

Warning Sign:

NGL Energy Partners LP gross margin has been in long term decline. The average rate of decline per year is -5.2%.


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.

NGL Energy Partners LP Annual Data

Mar09 Mar10 Mar11 Mar12 Mar13 Mar14 Mar15 Mar16 Mar17
Gross Profit Premium Member Only Premium Member Only Premium Member Only Premium Member Only 378.66 566.58 843.85 903.07 700.32

NGL Energy Partners LP Quarterly Data

Dec12 Mar13 Jun13 Sep13 Dec13 Mar14 Jun14 Sep14 Dec14 Mar15 Jun15 Sep15 Dec15 Mar16 Jun16 Sep16 Dec16 Mar17 Jun17 Sep17
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 116.81 178.62 249.36 139.46 152.61

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.

NGL Energy Partners LP's Gross Profit for the fiscal year that ended in Mar. 2017 is calculated as

Gross Profit (A: Mar. 2017 )=Revenue - Cost of Goods Sold
=13022.228 - 12321.909
=700

NGL Energy Partners LP's Gross Profit for the quarter that ended in Sep. 2017 is calculated as

Gross Profit (Q: Sep. 2017 )=Revenue - Cost of Goods Sold
=3923.329 - 3770.721
=153

Gross Profit for the trailing twelve months (TTM) ended in Sep. 2017 was 178.619 (Dec. 2016 ) + 249.362 (Mar. 2017 ) + 139.458 (Jun. 2017 ) + 152.608 (Sep. 2017 ) = $720 Mil.

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

NGL Energy Partners LP's Gross Margin % for the quarter that ended in Sep. 2017 is calculated as

Gross Margin % (Q: Sep. 2017 )=Gross Profit (Q: Sep. 2017 ) / Revenue (Q: Sep. 2017 )
=(Revenue - Cost of Goods Sold) / Revenue
=153 / 3923.329
=3.89 %

* 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

NGL Energy Partners LP had a gross margin of 3.89% for the quarter that ended in Sep. 2017 => No sustainable competitive advantage


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