Gross Margin % is calculated as gross profit divided by its revenue. GFI Group's Gross Profit for the
three
months ended in Sep. 2015 was €146.6 Mil. GFI Group's Revenue for the
three
months ended in Sep. 2015 was €150.8 Mil. Therefore, GFI Group's Gross Margin % for the quarter that ended in Sep. 2015 was 97.21%.
Warning Sign:
GFI Group Inc gross margin has been in long term decline. The average rate of decline per year is -2.7%.
The historical rank and industry rank for GFI Group's Gross Margin % or its related term are showing as below:
FRA:GDH1'
s Gross Margin % Range Over the Past 10 Years
Min: 29.71 Med: 89.46 Max: 100
Current: 91.7
During the past 13 years, the highestGross Margin % of GFI Group was 100.00%. The lowest was 29.71%. And the median was 89.46%.
FRA:GDH1's Gross Margin % is not ranked
in the Capital Markets industry.
Industry Median: 48.7
vs FRA:GDH1: 91.70
GFI Group had a gross margin of 97.21% for the quarter that ended in Sep. 2015 => Durable competitive advantage
The 5-Year average Growth Rate of Gross Margin for GFI Group was -2.70% per year.
GFI Group Gross Margin % Historical Data
The historical data trend for GFI 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.
Competitive Comparison of GFI Group's Gross Margin %
For the Capital Markets subindustry, GFI 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.
GFI Group's Gross Margin % Distribution in the Capital Markets Industry
For the Capital Markets industry and Financial Services sector, GFI Group's Gross Margin % distribution charts can be found below:
* The bar in red indicates where GFI Group's Gross Margin % falls into.
* 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.
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.
GFI Group (FRA:GDH1) 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
GFI Group had a gross margin of 97.21% for the quarter that ended in Sep. 2015 => Durable competitive advantage
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.
GFI Group Gross Margin % Related Terms
Thank you for viewing the detailed overview of GFI Group's Gross Margin % provided by GuruFocus.com. Please click on the following links to see related term pages.
GFI Group Inc was incorporated under the laws of the State of Delaware in 2001. The Company provides wholesale brokerage services, clearing services and electronic execution and trading support products for financial markets. It provide brokerage and trade execution services, clearing services, market data and trading platform and other software products to institutional customers in markets for a range of fixed income, financial, equity and commodity instruments. The Company provides execution services for its institutional wholesale customers by either matching their trading needs with counterparties having reciprocal interests or directing their orders to an exchange or other trading venue. The Company offers its customers a hybrid brokerage approach, combining a range of telephonic and electronic trade execution services, depending on the nature of the products and the specific needs of its customers. The Company operates in five business segments: Americas Brokerage; Europe, the Middle East and Africa Brokerage; Asia Brokerage, Clearing and Backed Trading and All Other. Its brokerage operations provide brokerage services in four product categories: fixed income, financial, equity and commodity. It's Clearing and Backed Trading segment encompasses its clearing, risk management, settlement and other back-office services, as well as the capital the Company provide to start-up trading groups, small hedge funds, market-makers and individual traders. The All Other segment captures revenues and costs that are not directly assignable to the brokerage or clearing and backed trading operating business segments, consisting of Company's corporate business activities and operations and commercial revenues from sales and licensing of trading systems software, analytic and market data. The Company offers products and services including Fixed Income Products, Financial Products, Equity Products, Commodity Products, Clearing and Settlement Services, and Software, Analytic and Market Data. The Company's competitors include ICAP Plc, Tullett Prebon Plc, CME, the Chicago Board Options Exchange, and Eurex and Euronext. The Company's businesses are subject to extensive regulation by government and self-regulatory organizations both in the United States and abroad.
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