Real Estate |
||
|---|---|---|
| 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.) |
4% |
| * Gross Profit Margin | Gross Profit ÷ Revenue Gross profit is your revenue minus what it costs to make your product. |
89% |
| * EBITDA Margin | EBITDA ÷ Revenue Many companies use this as a shorthand measure of cash flow. EBITDA is earnings before interest, taxes, depreciation, and amortization. |
21% |
| Return on Equity | Net Income ÷ Total Equity The return your shareholders are getting on their investment. |
4% |
| 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. |
2.3% |
| Interest Coverage Ratio | EBITDA ÷ Interest Expense This ratio shows roughly how easily you can repay your debts. |
3.1 |
| Debt to Equity Ratio | Total Liabilities ÷ Total Equity What you owe compared with what you own. |
2.9 |
| Sales per Employee | $217,679 | |
| Profit per Employee | $12,165 | |
| Payroll as % of Sales | 16% | |
| Advertising as % of Sales | 1.4% | |
| Inventory Days | (Inventory ÷ Cost of Goods Sold) x 365 The amount of time it takes to convert inventory into sales. |
1 |
| Accounts Payable Days | (Accounts Payable ÷ Cost of Goods Sold) x 365 The number of days, on average, you take to pay your bills. |
15 |
| Accounts Receivable Days | (Accounts Receivable ÷ Sales) x 365 The number of days, on average, your customers take to pay you. |
8 |
| 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 | 1,528 | |
* Industry Focus: Real Estate
For real estate firms, CFOs like to see a gross margin of 93 percent to 95 percent and an EBITDA margin of around 25 percent, says John M. Blackstock, a partner with B2BCFO. The lower averages here, he says, reflect the real estate downturn. But profits aren't the beginning and end of the story; real estate firms must also pay close attention to debt. The interest coverage and debt to equity ratios determine how much of your profits go to pay down debt and how much return to you.
