Credit Acceptance (Credit Acceptance) Gross Margin % : 66.73% (As of Dec. 2023)

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What is Credit Acceptance Gross Margin %?

Gross Margin % is calculated as gross profit divided by its revenue. Credit Acceptance's Gross Profit for the three months ended in Dec. 2023 was $324 Mil. Credit Acceptance's Revenue for the three months ended in Dec. 2023 was $485 Mil. Therefore, Credit Acceptance's Gross Margin % for the quarter that ended in Dec. 2023 was 66.73%.

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

CACC' s Gross Margin % Range Over the Past 10 Years
Min: 67.16 Med: 73.34 Max: 77.25
Current: 67.18

During the past 13 years, the highest Gross Margin % of Credit Acceptance was 77.25%. The lowest was 67.16%. And the median was 73.34%.

CACC's Gross Margin % is ranked better than
63.66% of 355 companies
in the Credit Services industry
Industry Median: 53.89 vs CACC: 67.18

Credit Acceptance had a gross margin of 66.73% for the quarter that ended in Dec. 2023 => Durable competitive advantage

The 5-Year average Growth Rate of Gross Margin for Credit Acceptance was -0.80% per year.

Credit Acceptance Gross Margin % Historical Data

The historical data trend for Credit Acceptance'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.

* Premium members only.

Credit Acceptance Gross Margin % Chart

Credit Acceptance Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

Gross Margin %

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71.64

74.99

77.25

73.94

67.16

Credit Acceptance Quarterly Data
	Mar19	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23
Gross Margin %	Get a 7-Day Free Trial															72.05	66.76	67.69	67.52	66.73

Competitive Comparison of Credit Acceptance's Gross Margin %

For the Credit Services subindustry, Credit Acceptance'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.

Credit Acceptance's Gross Margin % Distribution in the Credit Services Industry

For the Credit Services industry and Financial Services sector, Credit Acceptance's Gross Margin % distribution charts can be found below:

* The bar in red indicates where Credit Acceptance's Gross Margin % falls into.

Credit Acceptance Gross Margin % Calculation

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

Credit Acceptance's Gross Margin for the fiscal year that ended in Dec. 2023 is calculated as

Gross Margin % (A: Dec. 2023 )	=	Gross Profit (A: Dec. 2023 )	/	Revenue (A: Dec. 2023 )
	=	1262.4	/	1879.8
	=	(Revenue - Cost of Goods Sold)	/	Revenue
	=	(1879.8 - 617.4)	/	1879.8
	=	67.16 %

Credit Acceptance's Gross Margin for the quarter that ended in Dec. 2023 is calculated as

Gross Margin % (Q: Dec. 2023 )	=	Gross Profit (Q: Dec. 2023 )	/	Revenue (Q: Dec. 2023 )
	=	323.9	/	485.4
	=	(Revenue - Cost of Goods Sold)	/	Revenue
	=	(485.4 - 161.5)	/	485.4
	=	66.73 %

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.

Credit Acceptance (NAS:CACC) 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

Credit Acceptance had a gross margin of 66.73% for the quarter that ended in Dec. 2023 => 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.

Credit Acceptance Gross Margin % Related Terms

Thank you for viewing the detailed overview of Credit Acceptance's Gross Margin % provided by GuruFocus.com. Please click on the following links to see related term pages.

Credit Acceptance (Credit Acceptance) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Financial Services » Credit Services » Credit Acceptance Corp (NAS:CACC) » Definitions » Gross Margin %

Comparable Companies

Traded in Other Exchanges

CRDA34:Brazil

Address

25505 W. Twelve Mile Road, Southfield, MI, USA, 48034-8339

Website

https://www.creditacceptance.com

Credit Acceptance Corp is a consumer finance company that specializes in automobile loans. These loans are offered through a U.S. nationwide network of automobile dealers that benefit from sales of vehicles to consumers who could otherwise not obtain financing. The company also benefits from repeat and referral sales, and from sales to customers responding to advertisements for financing, but qualify for traditional financing. The company derives its revenue from finance charges, premiums earned on the reinsurance of vehicle service contracts, and other fees. Of these, financing charges, including servicing fees, are by far the largest source of revenue.

Executives

Wendy A Rummler	officer: Senior VP, Human Resources	25505 WEST TWELVE MILE ROAD, SOUTHFIELD MI 48034
Douglas W Busk	officer: Sr. Vice President & Treasurer	25505 WEST TWELVE MILE ROAD, SOUTH FIELD MI 48034
Nicholas J Elliott	officer: Chief Alignment Officer	25505 WEST TWELVE MILE RD, SOUTHFIELD MI 48034
Arthur L Smith	officer: Chief Analytics Officer	25505 W 12 MILE ROAD, SOUTHFIELD MI 48034
Sean Edward Quinn	director	C/O CIMPRESS PLC, 275 WYMAN STREET, WALTHAM MA 02451
Thomas W Smith	10 percent owner, other: Member of Section 13(d) Group	2200 BUTTS ROAD, SUITE 320, BOCA RATON FL 33431
Scott J Vassalluzzo	director, 10 percent owner, other: Member of Section 13(d) Group	2200 BUTTS ROAD, SUITE 320, BOCA RATON FL 33431
Donald A. Foss Irrevocable Trust Dated August 14, 2022	10 percent owner	39395 W. TWELVE MILE ROAD, SUITE 200, FARMINGTON HILLS MI 48331
Daniel A. Ulatowski	officer: Chief Sales Officer	25505 W 12 MILE ROAD, SOUTHFIELD MI 48034
Andrew K Rostami	officer: Chief Mktg and Product Officer	25505 WEST TWELVE MILE ROAD, SOUTHFIELD MI 48034
Prescott General Partners Llc	10 percent owner, other: Member of Section 13(d) Group	2200 BUTTS ROAD, SUITE 320, BOCA RATON FL 33431
Ravi Mohan Valiyaveettil	officer: Chief Technology Officer	25505 WEST TWELVE MILE RD, SOUTHFIELD MI 48034
Thomas N Tryforos	director	323 RAILROAD AVE, GREENWICH CT 06830
Kenneth Booth	officer: Chief Financial Officer	25505 WEST TWELVE MILE ROAD, SOUTHFIELD MI 48034
Donald A Foss	director, 10 percent owner, officer: Chairman	29777 TELEGRAPH ROAD, SUITE 2611, SOUTHFIELD MI 48034