Accommodations and Food |
||
|---|---|---|
| Net Profit Margin | Net Pretax Profit ÷ Revenue The bottom line -- the amount you have left after every other expense is taken out. (Sageworks adjusts the number so any extra funds the owners have taken out have been added back in.) |
3.9% |
| Gross Profit Margin | Gross Profit ÷ Revenue Gross profit is your revenue minus what it costs to make your product. |
67% |
| EBITDA Margin | EBITDA ÷ Revenue Many companies use this as a shorthand measure of cash flow. EBITDA is earnings before interest, taxes, depreciation, and amortization. |
11% |
| Return on Equity | Net Income ÷ Total Equity The return your shareholders are getting on their investment |
12.6% |
| Return on Assets | Net Income ÷ Total Assets Net income generated for each dollar of assets. It's especially relevant for capital-intensive industries, like manufacturing. |
6.3% |
| Interest Coverage Ratio | EBITDA ÷ Interest Expense This ratio shows roughly how easily you can repay your debts. |
5.6 |
| * Debt to Equity Ratio | Total Liabilities ÷ Total Equity What you owe compared with what you own. |
2.9 |
| Sales per Employee | $70,584 | |
| Profit per Employee | $5,103 | |
| Payroll as % of Sales | 23% | |
| Advertising as % of Sales | 2.1% | |
| ** Inventory Days | (Inventory ÷ Cost of Goods Sold) x 365 The amount of time it takes to convert inventory into sales. |
12 |
| Accounts Payable Days | (Accounts Payable ÷ Cost of Goods Sold) x 365 The number of days, on average, you take to pay your bills. |
20 |
| Accounts Receivable Days | (Accounts Receivable ÷ Sales) x 365 The number of days, on average, your customers take to pay you. |
4 |
| Current Ratio | Total Current Assets÷Total Current Liabilities The amount of cash (or assets that can be turned into cash) on hand. |
1.9 |
| Quick Ratio | (Cash + Accounts Receivable) รท Total Current Liabilities Similar to the current ratio, this is a good measure of a company's short-term cash position. |
1.2 |
| Sample Size | 1,048 | |
| Adjusted Net Profit Before Tax % Change | 9.60% | |
| Sales % Change | 6.30% | |
| OperatingProfit/Sales | 7.00%% | |
* Regardless of what industry you are in, if you ever plan to seek a loan, pay close attention to your debt to equity ratio, says Michael Foos, a partner at B2BCFO, a company that places temporary financial executives. Particularly in today's tough credit market, it's best to keep the number under 2 if you want bankers to see you as a good candidate. You can manage this ratio by putting more equity into the business. For example, if you have loaned money to your company, turning that into an equity investment could dramatically improve your numbers.
** Industry Focus: Food Services
For food businesses, managing inventory is crucial. For those that make frozen foods, 12 days is a good target, says Wayne Lorgus, a partner at B2BCFO, whereas restaurants want to keep inventory on hand for only a couple of days. But Lorgus notes that rising transportation costs are forcing some companies to order supplies in larger quantities to get a discount. The bottom line: If your inventory is higher than the industry median, make sure you have a valid reason for it.
