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Novo Nordisk A/S (NYSE:NVO)
Gross Profit
$14,059 Mil (TTM As of Mar. 2017)

Novo Nordisk A/S's gross profit for the three months ended in Mar. 2017 was $3,480 Mil. Novo Nordisk A/S's gross profit for the trailing twelve months (TTM) ended in Mar. 2017 was $14,059 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Novo Nordisk A/S's gross profit for the three months ended in Mar. 2017 was $3,480 Mil. Novo Nordisk A/S's revenue for the three months ended in Mar. 2017 was $4,091 Mil. Therefore, Novo Nordisk A/S's Gross Margin for the quarter that ended in Mar. 2017 was 85.06%.

Novo Nordisk A/S had a gross margin of 85.06% for the quarter that ended in Mar. 2017 => Durable competitive advantage

During the past 13 years, the highest Gross Margin of Novo Nordisk A/S was 85.00%. The lowest was 76.58%. And the median was 81.89%.


Definition

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

Novo Nordisk A/S'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
=15849.9234303 - 2436.47552606
=13,413

Novo Nordisk A/S's Gross Profit for the quarter that ended in Mar. 2017 is calculated as

Gross Profit (Q: Mar. 2017 )=Revenue - Cost of Goods Sold
=4090.69342803 - 611.188589996
=3,480

Novo Nordisk A/S Gross Profit for the trailing twelve months (TTM) ended in Mar. 2017 was 3536.32381815 (Jun. 2016 ) + 3547.37159211 (Sep. 2016 ) + 3495.8312064 (Dec. 2016 ) + 3479.50483804 (Mar. 2017 ) = $14,059 Mil.

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

Novo Nordisk A/S'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
=3,480 / 4090.69342803
=85.06 %

* 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

Novo Nordisk A/S had a gross margin of 85.06% 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.

Novo Nordisk A/S Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
Gross_Profit 6,2616,4327,9598,7109,51111,35412,75912,30213,38713,413

Novo Nordisk A/S Quarterly Data

Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16Mar17
Gross_Profit 3,4113,0933,4913,4533,5413,4303,5363,5473,4963,480
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