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GuruFocus has detected 6 Warning Signs with Ball Corp $BLL.
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Ball Corp (NYSE:BLL)
Gross Profit
$1,925 Mil (TTM As of Mar. 2017)

Ball Corp's gross profit for the three months ended in Mar. 2017 was $498 Mil. Ball Corp's gross profit for the trailing twelve months (TTM) ended in Mar. 2017 was $1,925 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Ball Corp's gross profit for the three months ended in Mar. 2017 was $498 Mil. Ball Corp's revenue for the three months ended in Mar. 2017 was $2,473 Mil. Therefore, Ball Corp's Gross Margin for the quarter that ended in Mar. 2017 was 20.14%.

Ball Corp had a gross margin of 20.14% for the quarter that ended in Mar. 2017 => Competition eroding margins

During the past 13 years, the highest Gross Margin of Ball Corp was 19.69%. The lowest was 15.74%. And the median was 18.00%.


Definition

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

Ball Corp'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
=9061 - 7296
=1,765

Ball Corp's Gross Profit for the quarter that ended in Mar. 2017 is calculated as

Gross Profit (Q: Mar. 2017 )=Revenue - Cost of Goods Sold
=2473 - 1975
=498

Ball Corp Gross Profit for the trailing twelve months (TTM) ended in Mar. 2017 was 434 (Jun. 2016 ) + 477 (Sep. 2016 ) + 516 (Dec. 2016 ) + 498 (Mar. 2017 ) = $1,925 Mil.

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

Ball Corp'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
=498 / 2473
=20.14 %

* 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

Ball Corp had a gross margin of 20.14% 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.

Ball Corp Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
Gross_Profit 1,1631,2211,1931,3761,5501,5621,5931,6671,5371,765

Ball Corp Quarterly Data

Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16Mar17
Gross_Profit 396362397407371340434477516498
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