A Closer Look at Gross Margin
An indicator of pricing power and investment quality. This soup to nuts course explains how to calculate and interpret gross margin and how to spot cheating.
An Introduction to Gross Margin is more than an introduction - it's a soup to nuts explanation of why gross margin is a critical operational parameter in business, how investors should use it, and some important pitfalls in its application. We highlight why gross margin is helpful in understanding the quality of an investment, and how to interpret it. We also explain how some companies have understood its importance to investors, how they game the system, and the signs investors should look for.
The course comprises around 40 minutes of video content - the videos are detailed and not the sort of thing you can run at 1.5x speed. You also get quizzes, exercises to complete (with answer sheets), and reading materials with each module. The course will take you 2-4 hours to complete, depending on your experience and how much of the reading you do (not all of it is a requirement - there is some optional content for those interested in particular aspects or sectors).
This course is an essential building block for any analyst or investor who is interested in assessing business quality - that's everyone.
Stephen (Steve) Clapham has been one of the top analysts in the City of London for over 25 years. A rated analyst at top banks like JP Morgan, Steve moved to become a partner and head of research at two multi-billion hedge funds where he was responsible for hundreds of millions of dollars of investments. Now he brings the benefit of those years of practitioner experience to help you improve your investing and analytical skills.
StartIntroduction to Gross Margin (4:29)
StartHistory - A Reading Exercise (1:53)
PreviewGross Margin Trends (7:18)
StartGross Margin Comparison (19:51)
StartMargin Improvement Strategies (4:41)
StartGross Profitability (6:32)
StartCheating on Gross Margin (7:11)
StartGross Margin Roundup (2:03)
StartBonus Lecture - Checking Accounting Policies Annually (2:04)
Frequently Asked Questions
Still not sure? Read what two experienced practitioners had to say:
Oliver Sherman: I took the online Gross Margin course and found it
informative and helpful. This should be no surprise as all elements of Steve’s
courses seem to be well thought-through, with excellent examples that bring the
subject matter to life. As a professional investment analyst I was hesitant to
take the course as I wondered if it would add to my knowledge base, but after
taking it I do feel it was worthwhile as (a) it’s always good to refresh ones
knowledge of an important subject matter and (b) there are always new ways to
look at things that can shed an extra layer of insight onto subjects. Gross margins
are sometimes undervalued for their informational value. The course
reminds/informs students of how they can be important and how to interpret
Alan Taylor: I did the course on Gross Margin. It was clear and informative. When I had completed it I got some helpful feedback to help improve my understanding on the one little bitthat I had difficulty in understanding. I particularly liked the slides on how companies sometimes'cheat' by changing the accounting bases from one year to another. Well put together and a valuable lesson in that I now do consider Gross margin trends when evaluating long term profitability.
This course has been tremendously popular with our students - enroll now!
It will teach you all you need to know about understanding and interpreting a company's gross margin, which is a key pillar in business quality.
The course is presented in a simple and easy to understand way, and will give you actionable ideas, and equip you with the tools and techniques to make this a central part of your analytical framework.
If you are not sure, you may want to check out some of our training clients and some of the commendations our courses have received from our professional investment clients at large institutions. We train the pros, and we can help you too improve your skills.
Enjoy the course.