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Anglogold Ashanti Ltd  (NYSE:AU) Gross Profit: $841 Mil (TTM As of Jun. 2017)

Anglogold Ashanti Ltd's gross profit for the six months ended in Jun. 2017 was $325 Mil. Anglogold Ashanti Ltd's gross profit for the trailing twelve months (TTM) ended in Jun. 2017 was $841 Mil.

Gross Margin % is calculated as gross profit divided by its revenue. Anglogold Ashanti Ltd's gross profit for the six months ended in Jun. 2017 was $325 Mil. Anglogold Ashanti Ltd's Revenue for the six months ended in Jun. 2017 was $2,034 Mil. Therefore, Anglogold Ashanti Ltd's Gross Margin % for the quarter that ended in Jun. 2017 was 15.98%.

Anglogold Ashanti Ltd had a gross margin of 15.98% for the quarter that ended in Jun. 2017 => No sustainable competitive advantage

During the past 13 years, the highest Gross Margin % of Anglogold Ashanti Ltd was 47.02%. The lowest was 17.57%. And the median was 34.34%.

Warning Sign:

Anglogold Ashanti Ltd gross margin has been in long term decline. The average rate of decline per year is -15.5%.


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.

Anglogold Ashanti Ltd Annual Data

Dec07 Dec08 Dec09 Dec10 Dec11 Dec12 Dec13 Dec14 Dec15 Dec16
Gross Profit Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 2,354.00 1,319.00 993.00 714.00 841.00

Anglogold Ashanti Ltd Semi-Annual Data

Dec07 Jun08 Dec08 Jun09 Dec09 Jun10 Dec10 Jun11 Dec11 Jun12 Dec12 Jun13 Dec13 Jun14 Dec14 Jun15 Dec15 Jun16 Dec16 Jun17
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 391.00 323.00 429.00 412.00 325.00

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.

Anglogold Ashanti Ltd'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
=4104 - 3263
=841

Anglogold Ashanti Ltd's Gross Profit for the quarter that ended in Jun. 2017 is calculated as

Gross Profit (Q: Jun. 2017 )=Revenue - Cost of Goods Sold
=2034 - 1709
=325

For stock reported semi-annually, GuruFocus uses latest annual data as the TTM data. Gross Profit for the trailing twelve months (TTM) ended in Jun. 2017 was $841 Mil.

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

Anglogold Ashanti Ltd's Gross Margin % for the quarter that ended in Jun. 2017 is calculated as

Gross Margin % (Q: Jun. 2017 )=Gross Profit (Q: Jun. 2017 ) / Revenue (Q: Jun. 2017 )
=(Revenue - Cost of Goods Sold) / Revenue
=325 / 2034
=15.98 %

* 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

Anglogold Ashanti Ltd had a gross margin of 15.98% for the quarter that ended in Jun. 2017 => No sustainable competitive advantage


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