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GuruFocus has detected 4 Warning Signs with Trio-Tech International $TRT.
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Trio-Tech International (AMEX:TRT)
Gross Profit
$9.44 Mil (TTM As of Mar. 2017)

Trio-Tech International's gross profit for the three months ended in Mar. 2017 was $2.45 Mil. Trio-Tech International's gross profit for the trailing twelve months (TTM) ended in Mar. 2017 was $9.44 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Trio-Tech International's gross profit for the three months ended in Mar. 2017 was $2.45 Mil. Trio-Tech International's revenue for the three months ended in Mar. 2017 was $9.83 Mil. Therefore, Trio-Tech International's Gross Margin for the quarter that ended in Mar. 2017 was 24.91%.

Trio-Tech International had a gross margin of 24.91% for the quarter that ended in Mar. 2017 => Competition eroding margins

During the past 13 years, the highest Gross Margin of Trio-Tech International was 26.30%. The lowest was 16.52%. And the median was 23.15%.


Definition

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

Trio-Tech International'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
=34.454 - 25.685
=8.77

Trio-Tech International's Gross Profit for the quarter that ended in Mar. 2017 is calculated as

Gross Profit (Q: Mar. 2017 )=Revenue - Cost of Goods Sold
=9.825 - 7.378
=2.45

Trio-Tech International Gross Profit for the trailing twelve months (TTM) ended in Mar. 2017 was 2.344 (Jun. 2016 ) + 2.358 (Sep. 2016 ) + 2.294 (Dec. 2016 ) + 2.447 (Mar. 2017 ) = $9.44 Mil.

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

Trio-Tech International'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
=2.45 / 9.825
=24.91 %

* 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

Trio-Tech International had a gross margin of 24.91% for the quarter that ended in Mar. 2017 => Competition eroding margins


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.

Trio-Tech International Annual Data

Jun07Jun08Jun09Jun10Jun11Jun12Jun13Jun14Jun15Jun16
Gross_Profit 12.098.984.877.028.325.146.358.308.938.77

Trio-Tech International Quarterly Data

Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16Mar17
Gross_Profit 2.442.492.202.182.122.132.342.362.292.45
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