Manufacturing |
||
|---|---|---|
| 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% |
| Gross Profit Margin | Gross Profit ÷ Revenue Gross profit is your revenue minus what it costs to make your product. |
35% |
| * EBITDA Margin | EBITDA ÷ Revenue Many companies use this as a shorthand measure of cash flow. EBITDA is earnings before interest, taxes, depreciation, and amortization.< |
7.9% |
| Return on Equity | Net Income ÷ Total Equity The return your shareholders are getting on their investment. |
15.6% |
| 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. |
7.9% |
| Interest Coverage Ratio | EBITDA ÷ Interest Expense This ratio shows roughly how easily you can repay your debts. |
7.5 |
| Debt to Equity Ratio | Total Liabilities ÷ Total Equity What you owe compared with what you own. |
2.2 |
| Sales per Employee | $203,965 | |
| Profit per Employee | $12,191 | |
| Payroll as % of Sales | 15% | |
| Advertising as % of Sales | 0.8% | |
| Inventory Days | (Inventory ÷ Cost of Goods Sold) x 365 The amount of time it takes to convert inventory into sales. |
49 |
| Accounts Payable Days | (Accounts Payable ÷ Cost of Goods Sold) x 365 The number of days, on average, you take to pay your bills. |
34 |
| Accounts Receivable Days | (Accounts Receivable ÷ Sales) x 365 The number of days, on average, your customers take to pay you. |
41 |
| Current Ratio | Total Current Assets÷Total Current Liabilities The amount of cash (or assets that can be turned into cash) on hand. |
2.5 |
| 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. |
1.4 |
| Sample Size | 3,673 | |
| Adjusted Net Profit Before Tax % Change | 9.60% | |
| Sales % Change | 6.30% | |
| OperatingProfit/Sales | 7.00%% | |
* If you are investing in new equipment, your EBITDA margin should be four or five percentage points higher than your net profit margin, says Neal Restivo, a CFO partner at Tatum. Because the average difference between the two metrics here is closer to 3 percent, that means businesses haven't been depreciating assets -- and are probably relying on old machines. That may reflect rising costs and the softening economy.
