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Honda Motor Co Gross Margin %

: 16.69% (As of Jun. 2020)
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Gross Margin % is calculated as gross profit divided by its revenue. Honda Motor Co's Gross Profit for the three months ended in Jun. 2020 was $3,295 Mil. Honda Motor Co's Revenue for the three months ended in Jun. 2020 was $19,742 Mil. Therefore, Honda Motor Co's Gross Margin % for the quarter that ended in Jun. 2020 was 16.69%.

Warning Sign:

Honda Motor Co Ltd gross margin has been in long term decline. The average rate of decline per year is -1.9%.


NYSE:HMC' s Gross Margin % Range Over the Past 10 Years
Min: 19.94   Med: 22.44   Max: 27.3
Current: 19.94

19.94
27.3

During the past 13 years, the highest Gross Margin % of Honda Motor Co was 27.30%. The lowest was 19.94%. And the median was 22.44%.

NYSE:HMC's Gross Margin % is ranked higher than
54% of the 1129 Companies
in the Vehicles & Parts industry.

( Industry Median: 18.45 vs. NYSE:HMC: 19.94 )

Honda Motor Co had a gross margin of 16.69% for the quarter that ended in Jun. 2020 => No sustainable competitive advantage

The 5-Year average Growth Rate of Gross Margin for Honda Motor Co was -1.90% per year.


Honda Motor Co Gross Margin % 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.

Honda Motor Co Annual Data
Mar11 Mar12 Mar13 Mar14 Mar15 Mar16 Mar17 Mar18 Mar19 Mar20
Gross Margin % Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 22.39 22.38 21.88 20.82 20.62

Honda Motor Co Quarterly Data
Sep15 Dec15 Mar16 Jun16 Sep16 Dec16 Mar17 Jun17 Sep17 Dec17 Mar18 Jun18 Sep18 Dec18 Mar19 Jun19 Sep19 Dec19 Mar20 Jun20
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 20.76 20.70 20.84 20.14 16.69

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.


Honda Motor Co Gross Margin % Distribution

* The bar in red indicates where Honda Motor Co's Gross Margin % falls into.



Honda Motor Co Gross Margin % Calculation

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

Honda Motor Co's Gross Margin for the fiscal year that ended in Mar. 2020 is calculated as

Gross Margin % (A: Mar. 2020 )=Gross Profit (A: Mar. 2020 ) / Revenue (A: Mar. 2020 )
=28600.6 / 138677.28641844
=(Revenue - Cost of Goods Sold) / Revenue
=(138677.28641844 - 110076.68066349) / 138677.28641844
=20.62 %

Honda Motor Co's Gross Margin for the quarter that ended in Jun. 2020 is calculated as


Gross Margin % (Q: Jun. 2020 )=Gross Profit (Q: Jun. 2020 ) / Revenue (Q: Jun. 2020 )
=3295.1 / 19741.685583139
=(Revenue - Cost of Goods Sold) / Revenue
=(19741.685583139 - 16446.631380707) / 19741.685583139
=16.69 %

* 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.


Honda Motor Co  (NYSE:HMC) 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

Honda Motor Co had a gross margin of 16.69% for the quarter that ended in Jun. 2020 => 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.


Honda Motor Co Gross Margin % Related Terms


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