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philjoe
Gross Profit

I can't reconcile Gross Profit with actual financial statements... is there something being added back? Taking Revneue less COGS doesn't seem to work...

Mar 21, 2019 11:07:52 AM       
pdemartino
Re: Gross Profit

The relationship of Sales less COGS equals Gross Profit should always hold, in both accounting and the CompuStat documentation.

I tested, and the cases where they didn't match were due to P123's fallbacks. We tend to prefer falling back to the prior financials rather than returning what is currently an NA. This prevents changes to models that would otherwise happen just because the data is unavailable for a few days or weeks.

I added this rule and all of the differences seemed to disappear:

CompleteStmt=True


That's the complete statement flag, of course. This will fail companies with preliminary data from earnings or press releases.

To be clear, Sales is nearly always going to be part of the earnings release. COGS will frequently be absent from it. In this case both COGS and Gross Profit will be NA in the database. (We don't calculate gross profit; we are merely giving the CompuStat data.) Under normal fallback on Portfolio123, Sales will be updated and then you'll see last quarter's/year's COGS and Gross Profit next to it.

If you're still seeing a difference, please give me the specific date and company. I'll take a look.

Mar 21, 2019 1:12:26 PM       
philjoe
Re: Gross Profit

Thanks.

Would you mind checking out Abbott Laboratores (NYSE:ABT). Gross Profit for year ended Dec 31, 2018, is 19,201m according to P123. Going directly to their 10-k, it would be 30,578m - 12,706m = 17,782m.

Mar 22, 2019 1:37:25 PM       
pdemartino
Re: Gross Profit

S&P is reporting the numbers that we are on the Capital IQ site. That's kind of the answer, full stop.

CapitalIQ gives the following modifications to COGS for ABT:

12,706 10-K COGS
-123 Acquisition-related costs
-106 Restructuring and Cost Reduction Initiatives
2,178 Amortization of intangible assets
-3,278 Depreciation and Amortization

11,377 Adjusted COGS

Mar 22, 2019 3:20:03 PM       
philjoe
Re: Gross Profit

I thought P123 was using data from Compustat, not Capital IQ?

Also, the numbers from Capital IQ are different... CapitalIQ shows COGS at 12,659m.

Mar 22, 2019 3:32:00 PM       
pdemartino
Re: Gross Profit

We use the CompuStat database, but I check against the CapitalIQ site. It matches what we're showing. I'm not sure of the source of your second number.

Mar 22, 2019 3:58:19 PM       
philjoe
Re: Gross Profit

I figured it out... CapitalIQ has its own numbers, and posts them, as well as Compustat numbers for each company. They calculate COGS differently.

Mar 22, 2019 4:12:25 PM       
philjoe
Re: Gross Profit

Thanks again for your help

Mar 22, 2019 4:31:39 PM