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GuruFocus has detected 8 Warning Signs with Kennedy-Wilson Holdings Inc $KW.
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Kennedy-Wilson Holdings Inc (NYSE:KW)
Gross Profit
$684.0 Mil (TTM As of Mar. 2017)

Kennedy-Wilson Holdings Inc's gross profit for the three months ended in Mar. 2017 was $173.5 Mil. Kennedy-Wilson Holdings Inc's gross profit for the trailing twelve months (TTM) ended in Mar. 2017 was $684.0 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Kennedy-Wilson Holdings Inc's gross profit for the three months ended in Mar. 2017 was $173.5 Mil. Kennedy-Wilson Holdings Inc's revenue for the three months ended in Mar. 2017 was $174.2 Mil. Therefore, Kennedy-Wilson Holdings Inc's Gross Margin for the quarter that ended in Mar. 2017 was 99.60%.

Kennedy-Wilson Holdings Inc had a gross margin of 99.60% for the quarter that ended in Mar. 2017 => Durable competitive advantage

During the past 10 years, the highest Gross Margin of Kennedy-Wilson Holdings Inc was 100.00%. The lowest was 51.38%. And the median was 96.71%.


Definition

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

Kennedy-Wilson Holdings Inc'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
=703.4 - 22.1
=681.3

Kennedy-Wilson Holdings Inc's Gross Profit for the quarter that ended in Mar. 2017 is calculated as

Gross Profit (Q: Mar. 2017 )=Revenue - Cost of Goods Sold
=174.2 - 0.7
=173.5

Kennedy-Wilson Holdings Inc Gross Profit for the trailing twelve months (TTM) ended in Mar. 2017 was 167.3 (Jun. 2016 ) + 171.8 (Sep. 2016 ) + 171.4 (Dec. 2016 ) + 173.5 (Mar. 2017 ) = $684.0 Mil.

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

Kennedy-Wilson Holdings Inc'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
=173.5 / 174.2
=99.60 %

* 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

Kennedy-Wilson Holdings Inc had a gross margin of 99.60% for the quarter that ended in Mar. 2017 => Durable competitive advantage


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.

Kennedy-Wilson Holdings Inc Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
Gross_Profit 0.032.244.339.062.264.7115.2377.9601.1681.3

Kennedy-Wilson Holdings Inc Quarterly Data

Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16Mar17
Gross_Profit 135.5136.2140.5158.1166.3170.7167.3171.8171.4173.5
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