Market Cap : 649.58 M | Enterprise Value : 1.4 B | PE Ratio : 8.52 | PB Ratio : 1.26 |
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Clearwater Paper's gross profit for the three months ended in Dec. 2020 was $77 Mil. Clearwater Paper's gross profit for the trailing twelve months (TTM) ended in Dec. 2020 was $294 Mil.
Gross Margin % is calculated as gross profit divided by its revenue. Clearwater Paper's gross profit for the three months ended in Dec. 2020 was $77 Mil. Clearwater Paper's Revenue for the three months ended in Dec. 2020 was $453 Mil. Therefore, Clearwater Paper's Gross Margin % for the quarter that ended in Dec. 2020 was 16.94%.
Clearwater Paper had a gross margin of 16.94% for the quarter that ended in Dec. 2020 => No sustainable competitive advantage
During the past 13 years, the highest Gross Margin % of Clearwater Paper was 15.74%. The lowest was 9.34%. And the median was 12.61%.
Warning Sign:
Clearwater Paper Corp gross margin has been in long term decline. The average rate of decline per year is -1.7%.
* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.
* The bar in red indicates where Clearwater Paper's Gross Profit falls into.
Gross Profit is the different between the sale prices and the cost of buying or producing the goods.
Clearwater Paper's Gross Profit for the fiscal year that ended in Dec. 2020 is calculated as
Gross Profit (A: Dec. 2020 ) | = | Revenue | - | Cost of Goods Sold |
= | 1868.6 | - | 1574.4 | |
= | 294 |
Clearwater Paper's Gross Profit for the quarter that ended in Dec. 2020 is calculated as
Gross Profit (Q: Dec. 2020 ) | = | Revenue | - | Cost of Goods Sold |
= | 452.8 | - | 376.1 | |
= | 77 |
Gross Profit for the trailing twelve months (TTM) ended in Dec. 2020 was 54.9 (Mar. 2020 ) + 83.8 (Jun. 2020 ) + 78.8 (Sep. 2020 ) + 76.7 (Dec. 2020 ) = $294 Mil.
Gross Profit is the numerator in the calculation of Gross Margin.
Clearwater Paper's Gross Margin % for the quarter that ended in Dec. 2020 is calculated as
Gross Margin % (Q: Dec. 2020 ) | = | Gross Profit (Q: Dec. 2020 ) | / | Revenue (Q: Dec. 2020 ) |
= | (Revenue - Cost of Goods Sold) | / | Revenue | |
= | 77 | / | 452.8 | |
= | 16.94 % |
* 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.
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
Clearwater Paper had a gross margin of 16.94% for the quarter that ended in Dec. 2020 => No sustainable competitive advantage
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