Switch to:
GuruFocus has detected 6 Warning Signs with Procter & Gamble Co $PG.
More than 500,000 people have already joined GuruFocus to track the stocks they follow and exchange investment ideas.
Procter & Gamble Co (NYSE:PG)
Gross Profit
$32,463 Mil (TTM As of Mar. 2017)

Procter & Gamble Co's gross profit for the three months ended in Mar. 2017 was $7,769 Mil. Procter & Gamble Co's gross profit for the trailing twelve months (TTM) ended in Mar. 2017 was $32,463 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Procter & Gamble Co's gross profit for the three months ended in Mar. 2017 was $7,769 Mil. Procter & Gamble Co's revenue for the three months ended in Mar. 2017 was $15,605 Mil. Therefore, Procter & Gamble Co's Gross Margin for the quarter that ended in Mar. 2017 was 49.79%.

Procter & Gamble Co had a gross margin of 49.79% for the quarter that ended in Mar. 2017 => Durable competitive advantage

During the past 13 years, the highest Gross Margin of Procter & Gamble Co was 52.03%. The lowest was 47.54%. And the median was 49.84%.


Definition

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

Procter & Gamble Co's Gross Profit for the fiscal year that ended in Jun. 2016 is calculated as

Gross Profit (A: Jun. 2016 )=Revenue - Cost of Goods Sold
=65299 - 32909
=32,390

Procter & Gamble Co's Gross Profit for the quarter that ended in Mar. 2017 is calculated as

Gross Profit (Q: Mar. 2017 )=Revenue - Cost of Goods Sold
=15605 - 7836
=7,769

Procter & Gamble Co Gross Profit for the trailing twelve months (TTM) ended in Mar. 2017 was 7720 (Jun. 2016 ) + 8416 (Sep. 2016 ) + 8558 (Dec. 2016 ) + 7769 (Mar. 2017 ) = $32,463 Mil.

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

Procter & Gamble Co'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
=7,769 / 15605
=49.79 %

* 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

Procter & Gamble Co had a gross margin of 49.79% 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.

Procter & Gamble Co Annual Data

Jun07Jun08Jun09Jun10Jun11Jun12Jun13Jun14Jun15Jun16
Gross_Profit 39,79042,21238,00441,01941,24540,59540,12535,37133,69332,390

Procter & Gamble Co Quarterly Data

Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16Mar17
Gross_Profit 8,9378,0037,7168,3758,4557,8407,7208,4168,5587,769
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
FEEDBACK