Forge Group (ASX:FGE) Gross Margin % : 37.74% (As of Jun. 2013)

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What is Forge Group Gross Margin %?

Gross Margin % is calculated as gross profit divided by its revenue. Forge Group's Gross Profit for the six months ended in Jun. 2013 was A$398 Mil. Forge Group's Revenue for the six months ended in Jun. 2013 was A$1,054 Mil. Therefore, Forge Group's Gross Margin % for the quarter that ended in Jun. 2013 was 37.74%.

The historical rank and industry rank for Forge Group's Gross Margin % or its related term are showing as below:

ASX:FGE's Gross Margin % is not ranked ^*
in the Construction industry.
Industry Median: 19.495
* Ranked among companies with meaningful Gross Margin % only.

Forge Group had a gross margin of 37.74% for the quarter that ended in Jun. 2013 => Competition eroding margins

The 5-Year average Growth Rate of Gross Margin for Forge Group was 0.00% per year.

Forge Group Gross Margin % Historical Data

The historical data trend for Forge Group's Gross Margin % can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

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Forge Group Gross Margin % Chart

Forge Group Annual Data

Trend

Jun07

Jun08

Jun09

Jun10

Jun11

Jun12

Jun13

Gross Margin %

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24.99

-30.14

-34.03

39.69

37.74

Forge Group Semi-Annual Data
	Jun07	Jun08	Jun09	Jun10	Jun11	Jun12	Jun13
Gross Margin %	Get a 7-Day Free Trial			24.99	-30.14	-34.03	39.69	37.74

Competitive Comparison of Forge Group's Gross Margin %

For the Engineering & Construction subindustry, Forge Group's Gross Margin %, along with its competitors' market caps and Gross Margin % data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

Forge Group's Gross Margin % Distribution in the Construction Industry

For the Construction industry and Industrials sector, Forge Group's Gross Margin % distribution charts can be found below:

* The bar in red indicates where Forge Group's Gross Margin % falls into.

Forge Group Gross Margin % Calculation

Gross Margin is the percentage of Gross Profit out of sales or Revenue.

Forge Group's Gross Margin for the fiscal year that ended in Jun. 2013 is calculated as

Gross Margin % (A: Jun. 2013 )	=	Gross Profit (A: Jun. 2013 )	/	Revenue (A: Jun. 2013 )
	=	397.8	/	1054.1
	=	(Revenue - Cost of Goods Sold)	/	Revenue
	=	(1054.1 - 656.334)	/	1054.1
	=	37.74 %

Forge Group's Gross Margin for the quarter that ended in Jun. 2013 is calculated as

Gross Margin % (Q: Jun. 2013 )	=	Gross Profit (Q: Jun. 2013 )	/	Revenue (Q: Jun. 2013 )
	=	397.8	/	1054.1
	=	(Revenue - Cost of Goods Sold)	/	Revenue
	=	(1054.1 - 656.334)	/	1054.1
	=	37.74 %

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.

Forge Group (ASX:FGE) Gross Margin % 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

Forge Group had a gross margin of 37.74% for the quarter that ended in Jun. 2013 => Competition eroding margins

Be Aware

If a company loses its competitive advantages, usually its gross margin declines well before its sales declines. Watching Gross Margin % and Operating Margin % closely helps avoid value trap situations.

Forge Group Gross Margin % Related Terms

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Forge Group (ASX:FGE) Business Description

Industry

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Comparable Companies

Traded in Other Exchanges

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Address

Website

http://www.forgegroup.com.au

Forge Group Ltd provides construction, commercial building, engineering, maintenance and workshop fabrication services. Its operations are segmented into four areas - Minerals & Resources, Power, Construction and Asset Management. The Minerals & Resources segment provides a wide range of engineering, design and construction services for the mining and metals sector. The Power segment provides turnkey power generation solutions to the energy and utilities sectors. The Construction segment offers a suite of construction services that covers all disciplines including heavy civil, structural, mechanical, piping, tanks, electrical, instrumentation, and building. Further, the Asset Management segment offers various asset management services. The Company has operational footprints across Australia, North America, Africa and Asia.

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