Construction |
||
|---|---|---|
| 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.) |
5.4% |
| Gross Profit Margin | Gross Profit ÷ Revenue Gross profit is your revenue minus what it costs to make your product. |
29% |
| EBITDA Margin | EBITDA ÷ Revenue Many companies use this as a shorthand measure of cash flow. EBITDA is earnings before interest, taxes, depreciation, and amortization. |
7.5% |
| Return on Equity | Net Income ÷ Total Equity The return your shareholders are getting on their investment. |
21% |
| 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. |
10.3% |
| Interest Coverage Ratio | EBITDA ÷ Interest Expense This ratio shows roughly how easily you can repay your debts. |
10.4 |
| * Debt to Equity Ratio | Total Liabilities ÷ Total Equity What you owe compared with what you own.< |
2.3 |
| Sales per Employee | $239,911 | |
| Profit per Employee | $15,944 | |
| Payroll as % of Sales | 13% | |
| Advertising as % of Sales | 0.6% | |
| Accounts Payable Days | (Accounts Payable ÷ Cost of Goods Sold) x 365 The number of days, on average, you take to pay your bills. |
30 |
| ** Accounts Receivable Days | (Accounts Receivable ÷ Sales) x 365 The number of days, on average, your customers take to pay you. |
44 |
| Current Ratio | Total Current Assets÷Total Current Liabilities The amount of cash (or assets that can be turned into cash) on hand. |
2.3 |
| 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. |
1.6 |
| Sample Size | 5,512 | |
| Adjusted Net Profit Before Tax % Change | 9.60% | |
| Sales % Change | 6.30% | |
| OperatingProfit/Sales | 7.00% | |
* For many CFOs, debt can never be too low. "I love less than 1," says Mike Eitler, a CFO partner with Tatum, a consulting and staffing firm. "I think it really unencumbers management to focus on providing better products." But a debt to equity ratio above 2 isn't necessarily cause for concern -- it simply means the company has decided to use debt rather than equity financing, which is common in construction and other capital-intensive industries. Companies need to monitor the number, however. A higher ratio forces managers to focus intently on cash flow and paying down debt, to the exclusion of business-building activities.
** In most industries, if it takes your customers an average of 44 days to pay bills, you're doing pretty well, says Eitler. "You're out of control if you go over 60." But he says the trend is more important than the absolute number. If the number is rising, that means you have less cash coming in, and you may be digging into retained earnings or borrowing money to pay bills.
