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iGo Inc  (OTCPK:IGOI) Gross Profit: \$-0.51 Mil (TTM As of Dec. 2013)

iGo Inc's gross profit for the three months ended in Dec. 2013 was \$-1.15 Mil. iGo Inc's gross profit for the trailing twelve months (TTM) ended in Dec. 2013 was \$-0.51 Mil.

Gross Margin % is calculated as gross profit divided by its revenue. iGo Inc's gross profit for the three months ended in Dec. 2013 was \$-1.15 Mil. iGo Inc's Revenue for the three months ended in Dec. 2013 was \$3.21 Mil. Therefore, iGo Inc's Gross Margin % for the quarter that ended in Dec. 2013 was -35.70%.

iGo Inc had a gross margin of -35.70% for the quarter that ended in Dec. 2013 => No sustainable competitive advantage

Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

iGo Inc Annual Data

 Dec04 Dec05 Dec06 Dec07 Dec08 Dec09 Dec10 Dec11 Dec12 Dec13 Gross Profit 15.17 14.41 8.47 5.28 -0.51

iGo Inc Quarterly Data

 Mar09 Jun09 Sep09 Dec09 Mar10 Jun10 Sep10 Dec10 Mar11 Jun11 Sep11 Dec11 Mar12 Jun12 Sep12 Dec12 Mar13 Jun13 Sep13 Dec13 Gross Profit 0.89 0.88 0.23 -0.47 -1.15

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.

iGo Inc's Gross Profit for the fiscal year that ended in Dec. 2013 is calculated as

 Gross Profit (A: Dec. 2013 ) = Revenue - Cost of Goods Sold = 16.928 - 17.44 = -0.51

iGo Inc's Gross Profit for the quarter that ended in Dec. 2013 is calculated as

 Gross Profit (Q: Dec. 2013 ) = Revenue - Cost of Goods Sold = 3.21 - 4.356 = -1.15

Gross Profit for the trailing twelve months (TTM) ended in Dec. 2013 was 0.881 (Mar. 2013 ) + 0.228 (Jun. 2013 ) + -0.474 (Sep. 2013 ) + -1.146 (Dec. 2013 ) = \$-0.51 Mil.

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

iGo Inc's Gross Margin % for the quarter that ended in Dec. 2013 is calculated as

 Gross Margin % (Q: Dec. 2013 ) = Gross Profit (Q: Dec. 2013 ) / Revenue (Q: Dec. 2013 ) = (Revenue - Cost of Goods Sold) / Revenue = -1.15 / 3.21 = -35.70 %

* 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

iGo Inc had a gross margin of -35.70% for the quarter that ended in Dec. 2013 => No sustainable competitive advantage

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