Market Cap : 43.78 B | Enterprise Value : 55.05 B | PE Ratio : 17.71 | PB Ratio : 6.39 |
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Dollar General's gross profit for the three months ended in Oct. 2020 was $2,568 Mil. Dollar General's gross profit for the trailing twelve months (TTM) ended in Oct. 2020 was $10,255 Mil.
Gross Margin % is calculated as gross profit divided by its revenue. Dollar General's gross profit for the three months ended in Oct. 2020 was $2,568 Mil. Dollar General's Revenue for the three months ended in Oct. 2020 was $8,200 Mil. Therefore, Dollar General's Gross Margin % for the quarter that ended in Oct. 2020 was 31.32%.
Dollar General had a gross margin of 31.32% for the quarter that ended in Oct. 2020 => Competition eroding margins
During the past 13 years, the highest Gross Margin % of Dollar General was 32.04%. The lowest was 30.45%. And the median was 30.91%.
* 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 Dollar General's Gross Profit falls into.
Gross Profit is the different between the sale prices and the cost of buying or producing the goods.
Dollar General's Gross Profit for the fiscal year that ended in Jan. 2020 is calculated as
Gross Profit (A: Jan. 2020 ) | = | Revenue | - | Cost of Goods Sold |
= | 27753.973 | - | 19264.912 | |
= | 8,489 |
Dollar General's Gross Profit for the quarter that ended in Oct. 2020 is calculated as
Gross Profit (Q: Oct. 2020 ) | = | Revenue | - | Cost of Goods Sold |
= | 8199.625 | - | 5631.385 | |
= | 2,568 |
Gross Profit for the trailing twelve months (TTM) ended in Oct. 2020 was 2272.763 (Jan. 2020 ) + 2595.692 (Apr. 2020 ) + 2818.235 (Jul. 2020 ) + 2568.24 (Oct. 2020 ) = $10,255 Mil.
Gross Profit is the numerator in the calculation of Gross Margin.
Dollar General's Gross Margin % for the quarter that ended in Oct. 2020 is calculated as
Gross Margin % (Q: Oct. 2020 ) | = | Gross Profit (Q: Oct. 2020 ) | / | Revenue (Q: Oct. 2020 ) |
= | (Revenue - Cost of Goods Sold) | / | Revenue | |
= | 2,568 | / | 8199.625 | |
= | 31.32 % |
* 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
Dollar General had a gross margin of 31.32% for the quarter that ended in Oct. 2020 => Competition eroding margins
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