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GuruFocus has detected 5 Warning Signs with Coca-Cola European Partners PLC $CCE.
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Coca-Cola European Partners PLC (NYSE:CCE)
Gross Profit
$4,335 Mil (TTM As of Mar. 2017)

Coca-Cola European Partners PLC's gross profit for the three months ended in Mar. 2017 was $978 Mil. Coca-Cola European Partners PLC's gross profit for the trailing twelve months (TTM) ended in Mar. 2017 was $4,335 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Coca-Cola European Partners PLC's gross profit for the three months ended in Mar. 2017 was $978 Mil. Coca-Cola European Partners PLC's revenue for the three months ended in Mar. 2017 was $2,548 Mil. Therefore, Coca-Cola European Partners PLC's Gross Margin for the quarter that ended in Mar. 2017 was 38.37%.

Coca-Cola European Partners PLC had a gross margin of 38.37% for the quarter that ended in Mar. 2017 => Competition eroding margins

During the past 13 years, the highest Gross Margin of Coca-Cola European Partners PLC was 38.96%. The lowest was 34.85%. And the median was 36.74%.


Definition

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

Coca-Cola European Partners PLC'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
=9633.96624473 - 5890.29535865
=3,744

Coca-Cola European Partners PLC's Gross Profit for the quarter that ended in Mar. 2017 is calculated as

Gross Profit (Q: Mar. 2017 )=Revenue - Cost of Goods Sold
=2547.59358289 - 1570.05347594
=978

Coca-Cola European Partners PLC Gross Profit for the trailing twelve months (TTM) ended in Mar. 2017 was 905.421348315 (Jun. 2016 ) + 1303.03030303 (Sep. 2016 ) + 1148.73417722 (Dec. 2016 ) + 977.540106952 (Mar. 2017 ) = $4,335 Mil.

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

Coca-Cola European Partners PLC'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
=978 / 2547.59358289
=38.37 %

* 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 European Partners PLC had a gross margin of 38.37% 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.

Coca-Cola European Partners PLC Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
Gross_Profit 7,9687,8092,4462,4673,0762,8782,8392,7502,5193,744

Coca-Cola European Partners PLC Quarterly Data

Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16Mar17
Gross_Profit 5115537057015955499051,3031,149978
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