Allocate Software (LSE:ALLA) Gross Margin % : 75.54% (As of May. 2014)

Allocate Software Gross Margin % Chart

Allocate Software Annual Data
	Trend	May05	May06	May07	May08	May09	May10	May11	May12	May13	May14
Gross Margin %		Get a 7-Day Free Trial					32.64	69.51	69.80	70.31	71.58

Allocate Software Semi-Annual Data
	Nov04	May05	Nov05	May06	Nov06	May07	Nov07	May08	Nov08	May09	Nov09	May10	Nov10	May11	Nov11	May12	Nov12	May13	Nov13	May14
Gross Margin %	Get a 7-Day Free Trial															73.70	67.43	72.52	66.37	75.54

Competitive Comparison of Allocate Software's Gross Margin %

For the Software - Application subindustry, Allocate Software'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.

Allocate Software's Gross Margin % Distribution in the Software Industry

For the Software industry and Technology sector, Allocate Software's Gross Margin % distribution charts can be found below:

* The bar in red indicates where Allocate Software's Gross Margin % falls into.

Allocate Software Gross Margin % Calculation

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

Allocate Software's Gross Margin for the fiscal year that ended in May. 2014 is calculated as

Allocate Software's Gross Margin for the quarter that ended in May. 2014 is calculated as

* 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.

Allocate Software  (LSE:ALLA) 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

Allocate Software had a gross margin of 75.54% for the quarter that ended in May. 2014 => 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.

Allocate Software Gross Margin % Related Terms

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Allocate Software (LSE:ALLA) Business Description