Technology and Media |
||
|---|---|---|
| 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.) |
5.7% |
| Gross Profit Margin | Gross Profit ÷ Revenue Gross profit is your revenue minus what it costs to make your product. |
66% |
| EBITDA Margin | EBITDA ÷ Revenue Many companies use this as a shorthand measure of cash flow. EBITDA is earnings before interest, taxes, depreciation, and amortization. |
9.7% |
| Return on Equity | Net Income ÷ Total Equity The return your shareholders are getting on their investment. |
11.3% |
| 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. |
2.2 |
| Sales per Employee | $195,688 | |
| Profit per Employee | $13,678 | |
| Payroll as % of Sales | 26% | |
| Advertising as % of Sales | 1.5% | |
| 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. |
38 |
| 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. |
1.7 |
| Sample Size | 430 | |
* Banks are more likely to lend to a company with a high interest coverage ratio -- more than 6 -- because it measures how easily the business can repay its debts. But companies that have recurring revenue, such as some software publishers, often can borrow more, even with a low number for interest coverage, says Roger Scadron, managing director at FTI Consulting. "If you can find a recurring revenue business model, that's where you want to be," Scadron says. "It sure is better than waking up every day and starting with zero."
