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GuruFocus has detected 3 Warning Signs with Neptune Technologies & Bioressources Inc $NEPT.
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Neptune Technologies & Bioressources Inc (NAS:NEPT)
Gross Profit
$9.50 Mil (TTM As of Nov. 2016)

Neptune Technologies & Bioressources Inc's gross profit for the three months ended in Nov. 2016 was $2.57 Mil. Neptune Technologies & Bioressources Inc's gross profit for the trailing twelve months (TTM) ended in Nov. 2016 was $9.50 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Neptune Technologies & Bioressources Inc's gross profit for the three months ended in Nov. 2016 was $2.57 Mil. Neptune Technologies & Bioressources Inc's revenue for the three months ended in Nov. 2016 was $9.04 Mil. Therefore, Neptune Technologies & Bioressources Inc's Gross Margin for the quarter that ended in Nov. 2016 was 28.44%.

Neptune Technologies & Bioressources Inc had a gross margin of 28.44% for the quarter that ended in Nov. 2016 => Competition eroding margins

During the past 13 years, the highest Gross Margin of Neptune Technologies & Bioressources Inc was 55.86%. The lowest was -53.21%. And the median was 16.94%.


Definition

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

Neptune Technologies & Bioressources Inc's Gross Profit for the fiscal year that ended in Feb. 2016 is calculated as

Gross Profit (A: Feb. 2016 )=Revenue - Cost of Goods Sold
=16.4035659926 - 13.0934261071
=3.31

Neptune Technologies & Bioressources Inc's Gross Profit for the quarter that ended in Nov. 2016 is calculated as

Gross Profit (Q: Nov. 2016 )=Revenue - Cost of Goods Sold
=9.03751674855 - 6.46717284502
=2.57

Neptune Technologies & Bioressources Inc Gross Profit for the trailing twelve months (TTM) ended in Nov. 2016 was 2.22077263173 (Feb. 2016 ) + 2.719196601 (May. 2016 ) + 1.99338359748 (Aug. 2016 ) + 2.57034390353 (Nov. 2016 ) = $9.50 Mil.

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

Neptune Technologies & Bioressources Inc's Gross Margin for the quarter that ended in Nov. 2016 is calculated as

Gross Margin (Q: Nov. 2016 )=Gross Profit (Q: Nov. 2016 ) / Revenue (Q: Nov. 2016 )
=(Revenue - Cost of Goods Sold) / Revenue
=2.57 / 9.03751674855
=28.44 %

* 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

Neptune Technologies & Bioressources Inc had a gross margin of 28.44% for the quarter that ended in Nov. 2016 => 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.

Neptune Technologies & Bioressources Inc Annual Data

May06May07May08Feb10Feb11Feb12Feb13Feb14Feb15Feb16
Gross_Profit 0.381.671.411.439.4410.0910.212.28-6.413.31

Neptune Technologies & Bioressources Inc Quarterly Data

Aug14Nov14Feb15May15Aug15Nov15Feb16May16Aug16Nov16
Gross_Profit -3.590.39-4.05-0.690.531.242.222.721.992.57
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