Liepajas metalurgs (ORSE:LME1R) Gross Margin % : -5.04% (As of Dec. 2012)

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What is Liepajas metalurgs Gross Margin %?

Gross Margin % is calculated as gross profit divided by its revenue. Liepajas metalurgs's Gross Profit for the six months ended in Dec. 2012 was Ls-2.92 Mil. Liepajas metalurgs's Revenue for the six months ended in Dec. 2012 was Ls57.94 Mil. Therefore, Liepajas metalurgs's Gross Margin % for the quarter that ended in Dec. 2012 was -5.04%.

Warning Sign:

Liepajas metalurgs gross margin has been in long term decline. The average rate of decline per year is -22.6%.

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

ORSE:LME1R' s Gross Margin % Range Over the Past 10 Years
Min: -7.82 Med: 7.7 Max: 16.82
Current: -7.82

During the past 8 years, the highest Gross Margin % of Liepajas metalurgs was 16.82%. The lowest was -7.82%. And the median was 7.70%.

ORSE:LME1R's Gross Margin % is not ranked
in the Steel industry.
Industry Median: 13.11 vs ORSE:LME1R: -7.82

Liepajas metalurgs had a gross margin of -5.04% for the quarter that ended in Dec. 2012 => No sustainable competitive advantage

The 5-Year average Growth Rate of Gross Margin for Liepajas metalurgs was -22.60% per year.

Liepajas metalurgs Gross Margin % Historical Data

The historical data trend for Liepajas metalurgs'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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Liepajas metalurgs Gross Margin % Chart

Liepajas metalurgs Annual Data

Trend

Dec05

Dec06

Dec07

Dec08

Dec09

Dec10

Dec11

Dec12

Gross Margin %

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11.29

0.55

0.84

5.52

3.95

Liepajas metalurgs Semi-Annual Data
	Dec05	Dec06	Dec07	Dec08	Dec09	Dec10	Dec11	Dec12
Gross Margin %	Get a 7-Day Free Trial			11.29	-4.70	-4.07	-4.62	-5.04

Competitive Comparison of Liepajas metalurgs's Gross Margin %

For the Steel subindustry, Liepajas metalurgs'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.

Liepajas metalurgs's Gross Margin % Distribution in the Steel Industry

For the Steel industry and Basic Materials sector, Liepajas metalurgs's Gross Margin % distribution charts can be found below:

* The bar in red indicates where Liepajas metalurgs's Gross Margin % falls into.

Liepajas metalurgs Gross Margin % Calculation

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

Liepajas metalurgs's Gross Margin for the fiscal year that ended in Dec. 2012 is calculated as

Gross Margin % (A: Dec. 2012 )	=	Gross Profit (A: Dec. 2012 )	/	Revenue (A: Dec. 2012 )
	=	13.6	/	344.762
	=	(Revenue - Cost of Goods Sold)	/	Revenue
	=	(344.762 - 331.138)	/	344.762
	=	3.95 %

Liepajas metalurgs's Gross Margin for the quarter that ended in Dec. 2012 is calculated as

Gross Margin % (Q: Dec. 2012 )	=	Gross Profit (Q: Dec. 2012 )	/	Revenue (Q: Dec. 2012 )
	=	-2.9	/	57.944
	=	(Revenue - Cost of Goods Sold)	/	Revenue
	=	(57.944 - 60.867)	/	57.944
	=	-5.04 %

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.

Liepajas metalurgs (ORSE:LME1R) 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

Liepajas metalurgs had a gross margin of -5.04% for the quarter that ended in Dec. 2012 => No sustainable 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.

Liepajas metalurgs Gross Margin % Related Terms

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Liepajas metalurgs (ORSE:LME1R) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Basic Materials » Steel » Liepajas metalurgs (ORSE:LME1R) » Definitions » Gross Margin %

Traded in Other Exchanges

N/A

Address

Website

http://lm.metalurgs.lv

Liepajas metalurgs, is engaged in the production of steel and is the only steel production plant in the Baltic States. It offers steel rolled bars, reinforcing bars, rolled steel, castings and slag and also provides various port services.

Liepajas metalurgs (ORSE:LME1R) Headlines

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