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Inland Real Estate Corp  (NYSE:IRC) Gross Margin %: 85.24% (As of Dec. 2015)

Gross Margin % is calculated as gross profit divided by its revenue. Inland Real Estate Corp's Gross Profit for the three months ended in Dec. 2015 was $43.1 Mil. Inland Real Estate Corp's Revenue for the three months ended in Dec. 2015 was $50.6 Mil. Therefore, Inland Real Estate Corp's Gross Margin % for the quarter that ended in Dec. 2015 was 85.24%.




Inland Real Estate Corp had a gross margin of 85.24% for the quarter that ended in Dec. 2015 => Durable competitive advantage

The 5-Year average Growth Rate of Gross Margin for Inland Real Estate Corp was 0.00% 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.

Inland Real Estate Corp Annual Data

Dec06 Dec07 Dec08 Dec09 Dec10 Dec11 Dec12 Dec13 Dec14 Dec15
Gross Margin % Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 83.63 86.23 85.67 84.21 85.61

Inland Real Estate Corp Quarterly Data

Mar11 Jun11 Sep11 Dec11 Mar12 Jun12 Sep12 Dec12 Mar13 Jun13 Sep13 Dec13 Mar14 Jun14 Sep14 Dec14 Mar15 Jun15 Sep15 Dec15
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 85.68 84.00 86.92 86.50 85.24

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.

Inland Real Estate Corp's Gross Margin for the fiscal year that ended in Dec. 2015 is calculated as

Gross Margin % (A: Dec. 2015 )=Gross Profit (A: Dec. 2015 ) / Revenue (A: Dec. 2015 )
=174.6 / 203.9
=(Revenue - Cost of Goods Sold) / Revenue
=(203.9 - 29.35) / 203.9
=85.61 %

Inland Real Estate Corp's Gross Margin for the quarter that ended in Dec. 2015 is calculated as


Gross Margin % (Q: Dec. 2015 )=Gross Profit (Q: Dec. 2015 ) / Revenue (Q: Dec. 2015 )
=-7.5 / 50.553
=(Revenue - Cost of Goods Sold) / Revenue
=(50.553 - 7.464) / 50.553
=85.24 %

* 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

Inland Real Estate Corp had a gross margin of 85.24% for the quarter that ended in Dec. 2015 => 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.


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