Wholesale Trade |
||
|---|---|---|
| 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.) |
3.4% |
| 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. |
4.9% |
| * Return on Equity | Net Income ÷ Total Equity The return your shareholders are getting on their investment. |
16.4% |
| * 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. |
7.6% |
| Interest Coverage Ratio | EBITDA ÷ Interest Expense This ratio shows roughly how easily you can repay your debts. |
6.9 |
| Debt to Equity Ratio | Total Liabilities ÷ Total Equity What you owe compared with what you own. |
2.6 |
| Sales per Employee | $395,290 | |
| Profit per Employee | $15,771 | |
| Payroll as % of Sales | 12% | |
| Advertising as % of Sales | 0.7% | |
| Inventory Days | (Inventory ÷ Cost of Goods Sold) x 365 The amount of time it takes to convert inventory into sales. |
51 |
| 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. |
35 |
| 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. |
1.2 |
| Sample Size | 2,222 | |
* Return on assets is a key measure for wholesalers that have large investments in equipment. Return on equity is more relevant for those that don't. But companies shouldn't focus exclusively on those numbers; rather, they should focus on all the metrics that contribute to them. Gross margin and inventory days are two of the key metrics for wholesalers, says Dean Gardner, a CFO partner with Tatum. If your gross margin is 30 percent or higher and inventory is under 45 days, he says, "ROE and ROA should take care of themselves."
