If a company sells phones for 500 dollars and the cost of the producing the phone is 0, the current gross profit margin is 50 percent ((500-250)/500).If the company is able to reduce production costs from 0 to 0, the gross profit margin is 60 percent ((500-200)/500).
A company that sells consulting services will likely have higher profit margins, but sell lower quantities.
Jabil Circuit Inc., together with its subsidiaries, provides electronic manufacturing services and solutions worldwide.
The company operates in two segments, Electronics Manufacturing Services and Diversified Manufacturing Services.
It offers electronics design, production, and product management services to companies in the automotive, consumer lifestyles and wearable technologies, defense and aerospace, digital home, emerging growth, healthcare, industrial and energy, mobility, networking and telecommunications, packaging, point of sale, and printing and storage industries.
A gross profit margin is the difference between sales and the cost of goods sold divided by revenue.
This represents the percentage of each dollar of a company's revenue available after accounting for cost of goods sold.
If a company produces phones and earns million in sales but pays million for the items sold, then the company's gross profit margin would be (M - M) / M = 25 percent.
Cutting costs result in higher gross profit margins.
The company's services include integrated design and engineering; component selection, sourcing, and procurement; automated assembly; design and implementation of product testing; parallel global production; enclosure services; systems assembly, direct order fulfillment, and configure to order; and injection molding, metal, plastics, precision machining, and automation services.
(NYSE: JBL), a global electronic product solutions company, on May 2, 2006 of the SEC's inquiry concerning Jabil's historical stock option grant practices.
As previously disclosed, the Securities and Exchange Commission (the "SEC") notified Jabil Circuit, Inc.