Gross margin (GMgn%) is a profitability metric that evaluates a company's gross profit relative to its revenue or sales, expressed as a percentage. The higher the gross margin, the more capital the company retains, which can be utilized to cover other expenses or reward shareholders.
We provide two versions of the gross margin metric: GMgn% and GMgn%_GAAP. The difference between these two lies in including depreciation and amortization expenses in the GAAP version, impacting the gross profit calculation.
Formulas
GMgn% = GrossProfit / Sales
GMgn%_GAAP = (GrossProfit - Depreciation and Amortization) / Sales
GMgn% offers a view of the company's operational efficiency, excluding depreciation and amortization, which are non-cash expenses. This can be useful for evaluating the core profitability of a company's business operations. On the other hand, GMgn%_GAAP, by including depreciation and amortization, provides a more conservative perspective, aligning closer with GAAP principles.
The data points come from SEC filings or company earnings announcements. Because our data provider standardizes financial information to make it comparable across different companies, the specific figures may not always match the original source. For a list of all our line items please refer to our Line-Item Reference Spreadsheet.
There are two access methods: prebuilt factors and using a function.
ItemName(offset, type[, NAHandling])
offset: 0-24 (for interim) 0-19 (for annual)
type: QTR (for interim), ANN (for annual), TTM (for trailing twelve months)
NAHandling: [FALLBACK], KEEPNA, ZERONA
For types QTR & ANN the value is taken straight out of the filing with the corresponding offset, ex: 0 is most recent, 1 is previous, etc. TTM types are computed in two ways: for income and cash flow statement values are calculated by adding four quarterly values. For balance sheet items, TTM is the average of the trailing four quarters.
The NAHandling parameter is optional and is used to control what happens in preliminary reports where many items could be missing. Preliminary reports are press releases by the company and only affect the most recent ("0") offset period. They can last several weeks and can cause false signals due to incomplete data (see "CompleteStmt" for a way to identify companies with preliminary data).
Three options are available when an NA is found in a preliminary report:
|
FALLBACK |
The default setting. When an NA is encountered the value is pulled from the offset "1" period. |
|
KEEPNA |
NAs will be preserved, which can cause the entire expression to fail. |
|
ZERONA |
NAs are converted to 0 |
Below are the available pre-built factors for convenience with the corresponding formula parameters. Please note that availability varies by factor.
| Period | Description | Corresponding Parameters |
|
Q |
Recent Quarter |
(0, QTR) |
| PQ | Prior Quarter | (1, QTR) |
| PYQ | Prior Year quarter | (4, QTR) |
| TTM | Trailing Twelve Months | (0, TTM) |
| PTM | Prior Trailing Twelve Months | (4, TTM) |
| A | Recent Annual | (0, ANN) |
| PY | Prior Year | (1, ANN) |
| Gr%PQ | Growth % PQ | (0, QTR) / (1, QTR) |
| Gr%PYQ | Growth % PYQ | (0, QTR) / (4, QTR) |
| Gr%TTM | Growth % TTM | (0, TTM) / (4, TTM) |
| Gr%PQTTM | Growth % TTM 1Q Ago | (0, TTM) / (1, TTM) |
| Gr%A | Growth % Annual | (0, ANN) / (1, ANN) |
| Gr%3Y | Growth % 3 year | (0, ANN) / (3, ANN) annualized |
| Gr%5Y | Growth % 5 year | (0, ANN) / (5, ANN) annualized |
| Gr%10Y | Growth % 10 year | (0, ANN) / (10, ANN) annualized |
| RSD%ANN | RSD % 10Y of annuals | LoopRelStdDev ("function(CTR,ANN)",10,0,1,1)) |
| RSD%TTM | RSD % 5Y of TTM | LoopRelStdDev ("function(CTR*2,TTM)",10,0,1,1)) |
| RegEstTTM | Regression Est 5Y | Eval(LinReg("function(CTR * 2, TTM)", 10) , EstimateY(0), NA) |
| RegGr%TTM | Regression Gr% 5Y | Eval(LinReg("function(CTR * 2, TTM)", 10) , RegGr%(2), NA) |
| RegEstANN | Regression Est 10Y | Eval(LinReg("function(CTR, ANN)", 10) , EstimateY(0), NA) |
| RegGr%ANN | Regression Gr% 10Y | Eval(LinReg("function(CTR, ANN)", 10) , RegGr%(1), NA) |
| Period | Description | Corresponding Parameters |
| %SalesQ | % of Q Sales | function(0, QTR) / Sales(0, QRT) |
| %SalesA | % of A Sales | function(0, ANN) / Sales(0, ANN) |
| %AssetQ | % of Q Assets | function(0, QTR) / AstTot(0, QRT) |
| %AssetA | % of A Assets | function(0, ANN) / AstTot(0, ANN) |
| PSQ | Per Share Q | function(0, QTR) / Shares(0, QRT) |
| PSA | Per Share A | function(0, ANN) / Shares(0, ANN) |
| 3YAvg | 3 Year Average | LoopAvg("function(CTR, ANN)", 3) |
| 5YAvg | 5 Year Average | LoopAvg("function(CTR, ANN)", 5) |
NOTES:
Click here for the Line-Item Reference Spreadsheet.