1.05(1.92%) Volume: 2,689,656 10:08PM EDT| Market Cap : 32.37 B | Enterprise Value : 46.72 B | P/E (TTM) : 18.50 | P/B : 4.54 |
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Gross Margin % is calculated as gross profit divided by its revenue. General Mills's Gross Profit for the three months ended in May. 2019 was USD 1,461 Mil. General Mills's Revenue for the three months ended in May. 2019 was USD 4,162 Mil. Therefore, General Mills's Gross Margin % for the quarter that ended in May. 2019 was 35.11%.
During the past 13 years, the highest Gross Margin % of General Mills was 40.01%. The lowest was 33.74%. And the median was 35.61%.
General Mills had a gross margin of 35.11% for the quarter that ended in May. 2019 => Competition eroding margins
The 5-Year average Growth Rate of Gross Margin for General Mills was -0.40% per year.
* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.
| General Mills Quarterly Data | ||||||||||||||||||||
| Aug14 | Nov14 | Feb15 | May15 | Aug15 | Nov15 | Feb16 | May16 | Aug16 | Nov16 | Feb17 | May17 | Aug17 | Nov17 | Feb18 | May18 | Aug18 | Nov18 | Feb19 | May19 | |
| Gross Margin % |
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36.49 | 32.80 | 34.22 | 34.37 | 35.11 |
* The bar in red indicates where General Mills's Gross Margin % falls into.
Gross Margin is the percentage of Gross Profit out of sales or Revenue.
General Mills's Gross Margin for the fiscal year that ended in May. 2019 is calculated as
| Gross Margin % (A: May. 2019 ) | = | Gross Profit (A: May. 2019 ) | / | Revenue (A: May. 2019 ) |
| = | 5756.8 | / | 16865.2 | |
| = | (Revenue - Cost of Goods Sold) | / | Revenue | |
| = | (16865.2 - 11108.4) | / | 16865.2 | |
| = | 34.13 % |
General Mills's Gross Margin for the quarter that ended in May. 2019 is calculated as
| Gross Margin % (Q: May. 2019 ) | = | Gross Profit (Q: May. 2019 ) | / | Revenue (Q: May. 2019 ) |
| = | -2700.4 | / | 4161.7 | |
| = | (Revenue - Cost of Goods Sold) | / | Revenue | |
| = | (4161.7 - 2700.4) | / | 4161.7 | |
| = | 35.11 % |
* 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.
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
General Mills had a gross margin of 35.11% for the quarter that ended in May. 2019 => Competition eroding margins
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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