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AmerisourceBergen Corp  (NYSE:ABC) Gross Margin %: 2.79% (As of Jun. 2017)

Gross Margin % is calculated as gross profit divided by its revenue. AmerisourceBergen Corp's Gross Profit for the three months ended in Jun. 2017 was $1,080 Mil. AmerisourceBergen Corp's Revenue for the three months ended in Jun. 2017 was $38,707 Mil. Therefore, AmerisourceBergen Corp's Gross Margin % for the quarter that ended in Jun. 2017 was 2.79%.

Warning Sign:

AmerisourceBergen Corp gross margin has been in long term decline. The average rate of decline per year is -3.5%.


NYSE:ABC' s Gross Margin % Range Over the Past 10 Years
Min: 2.49   Max: 3.52
Current: 2.97

2.49
3.52

During the past 13 years, the highest Gross Margin % of AmerisourceBergen Corp was 3.52%. The lowest was 2.49%. And the median was 2.93%.

NYSE:ABC's Gross Margin % is ranked lower than
93% of the 58 Companies
in the Global industry.

( Industry Median: 19.67 vs. NYSE:ABC: 2.97 )

AmerisourceBergen Corp had a gross margin of 2.79% for the quarter that ended in Jun. 2017 => No sustainable competitive advantage

The 5-Year average Growth Rate of Gross Margin for AmerisourceBergen Corp was -3.50% per year.


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

* Premium members only.

AmerisourceBergen Corp Annual Data

Sep07 Sep08 Sep09 Sep10 Sep11 Sep12 Sep13 Sep14 Sep15 Sep16
Gross Margin % Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 3.37 2.85 2.49 2.60 2.91

AmerisourceBergen Corp Quarterly Data

Sep12 Dec12 Mar13 Jun13 Sep13 Dec13 Mar14 Jun14 Sep14 Dec14 Mar15 Jun15 Sep15 Dec15 Mar16 Jun16 Sep16 Dec16 Mar17 Jun17
Gross Margin % Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 3.00 2.99 2.72 3.38 2.79

Competitive Comparison
* 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.


Calculation

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

AmerisourceBergen Corp's Gross Margin for the fiscal year that ended in Sep. 2016 is calculated as

Gross Margin % (A: Sep. 2016 )=Gross Profit (A: Sep. 2016 ) / Revenue (A: Sep. 2016 )
=4272.6 / 146849.686
=(Revenue - Cost of Goods Sold) / Revenue
=(146849.686 - 142577.08) / 146849.686
=2.91 %

AmerisourceBergen Corp's Gross Margin for the quarter that ended in Jun. 2017 is calculated as


Gross Margin % (Q: Jun. 2017 )=Gross Profit (Q: Jun. 2017 ) / Revenue (Q: Jun. 2017 )
=-37627.3 / 38707.144
=(Revenue - Cost of Goods Sold) / Revenue
=(38707.144 - 37627.269) / 38707.144
=2.79 %

* 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

AmerisourceBergen Corp had a gross margin of 2.79% for the quarter that ended in Jun. 2017 => 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.


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