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May14

Preparing financial presentations for board meetings, shareholders

Board meeting presentations can cause a CFO or business owner headaches, both in the preparation and in the actual presentation. For the financial portion of the presentation, knowing what to include can be a big source of frustration: too much financial detail can be overwhelming or completely uninteresting to board members while too little financial detail could be a missed opportunity for advice from experienced board members.

If you are tasked with leading the financial discussion of a board meeting (or even a shareholders meeting), here are some recommendations that will increase efficacy and reduce preparation time. [More]

Apr21

Business owner? Get more from your bookkeeping software, QuickBooks®

Given all the other demands on business owners’ time, financial analysis or a thorough review of the company’s financial situation is usually under-prioritized. Businesses that use QuickBooks® or other common bookkeeping systems* can leverage the centralized and up-to-date data they have in the system to get more immediate and in-depth insights into their company. [More]

Apr14

Benchmark your business & win the horse race

Maybe it’s an inherent competitiveness or just the pursuit of improvement, but it’s commonplace for people to seek out benchmarks they can use to assess their relative position or performance. It interests people to know how they compare to their peers. Benchmarks have a place in business, too, and can be an invaluable instrument to help business owners succeed. Compare running a business to running in a horse race. [More]

Mar21

Indicators of retailers’ health improving

Sales, profitability and other indicators of privately held retailers’ health are showing improvement, according to data from Sageworks. [More]

Aug15

Helping Clients through Better Benchmarking

Helping your business clients with industry-specific, financial benchmarking is extremely important to measure and improve their performance. To provide real value, you need industry data that is accurate, up to date, and relevant to your client’s size and location. Learn how you will also benefit from their increased success as you continue to advise your clients while they grow. [More]

May23

Private-company sales, margin growth continue - Sageworks Stats @ Forbes.com

Privately held U.S. companies – the millions of businesses that drive job creation and GDP –are growing sales so far this year at about the same rate as they did for all of 2011, according to new data from Sageworks Inc., a financial information company. Companies across all industries, on average, have generated an 8.1 percent increase in sales so far this year, compared with 8.25 percent growth for all of 2011, based on a financial statement analysis. On a trailing 12-month basis, sales growth has been in the 6 to 8 percent range each month of 2012.  Profitability, meanwhile, has improved year to date for private companies, compared with 2011. The average net profit margin for all private companies was 6.84 percent through May 10, an improvement from the 5.87 percent average margin for all of last year. Net profit margin shows how many dollars of profit a company generates from each $100 in sales. All in all, said Sageworks analyst Samara Zippin, companies continue to generate healthy gains. “Overall, private companies are still doing well, and we’re seeing similar growth trends to last year, while profit margins have improved quite a bit,” she said. “If 2012 continues as it is now throughout the year, I think we’ll see positive trends comparable to 2011.” “The biggest caveat is the unemployment rate,” she said. Unemployment of around 8 percent remains too high, especially considering the U.S. is more than 30 months into the recovery. The fear is that if unemployment doesn’t fall at a faster rate, the economy may bump into the next recession before job growth is healthy. Zippin said it may be that lower costs are behind the margin gains. Indeed, average gross profit margin is higher so far in 2012 than it was, on average, for 2011. Overhead, or sellling, general and administrative expenses, relative to sales has been higher. “It appears that regardless of what sales growth is doing, companies are learning to become more efficient,” she said. Through its cooperative data model, Sageworks collects financial statements for private companies from accounting firms, banks and credit unions, and aggregates the data at an approximate rate of 1,000 statements a day. Net profit margin has been adjusted to exclude taxes and include owner compensation in excess of their market-rate salaries. These adjustments are commonly made to private company financials in order to provide a more accurate picture of the companies’ operational performance. How important are private companies? While Wall Street focuses on the performance of public companies, not all employers in the U.S. contribute to new job creation equally. Out of the 27 million businesses in America, only about 6,200 are publicly traded on listed exchanges. Most others are privately held, and many of them are small businesses. No government agency tracks private company performance by itself. But small businesses, which the government considers to be any company with fewer than 500 employees, drive approximately half of GDP and 65% of new job creation, according to the Small Business Administration. Figures for all privately held businesses, including medium and large private companies, would be even higher, assuming most small businesses (by the government’s definition) aren’t publicly traded. Sageworks’ industry ratios show that over the last 12 months, industries that have had the highest growth rates among privately held companies have included manufacturing, mining, transportation and warehousing, and professional services. Construction, too, has been among the strongest sectors, with roughly 15 percent sales growth over the last 12 months. Health care and social assistance (NAICS code 62) and accommodations and lodging (NAICS code 72) have each generated sales growth that trails the all-industry average over the last 12 months. Nevertheless, sales growth in those sectors has been around 6 percent, outpacing the broader economy. See the entire post on Forbes.com here.

Apr25

It wasn't overnight, but private hotels have turned around

Privately owned hotels have weathered a difficult recession and are back on a profitable path. The industry posted positive net profit margins in 2011 for the first time in three years, and sales increased about 8 percent, according to a financial statement analysis of privately owned hotels by Sageworks, a financial information company. Growth in average revenue per available room, or revPAR, and ongoing expense control seem to have contributed. The sales growth isn’t dramatically higher than the 5 percent increase hotels saw in 2010, but it’s a continued improvement from the 6 percent decline in 2009 among the hotels analyzed by Sageworks. “While hotels saw occupancy levels improve only 4 percent between 2010 and 2011, they were able to increase revenue per available room, or revPAR, by more than 7 percent, which suggests strength in their rates,” said Sageworks analyst Greg Mulholland. “This may be tied to fewer new hotels opening during the recession, which could cause prices to stay high and contribute to the overall sales growth of more than 8 percent. “ Net profit margins for the Traveler Accommodation industry (NAICS 7211) were nearly 7 percent in 2011, following almost breakeven margins in 2010, Sageworks’ industry ratios show. Average margins ranged from negative 2 percent to nearly negative 5 percent in 2008 and 2009, according to Sageworks’ data. Through its cooperative data model, Sageworks collects financial statements for private companies from accounting firms, banks and credit unions, and aggregates the data at an approximate rate of 1,000 statements a day. Net profit margins are adjusted to exclude taxes and owner compensation in excess of their market-rate salaries — adjustments commonly made to private company financials in order to provide a more accurate picture of the companies’ operational performance. “The hotel industry’s profit margins, like those of other industries, suggest there were cutbacks early in the recession, when companies were trying to be as efficient as possible,” Mulholland said. “Now they’re reaping the rewards of that. For example, hotels’ ratio of utility expenses to sales is more than a full percentage point lower than it was last year. That kind of expense control can magnify the impact of higher sales when it comes to the bottom line.” Mulholland said it’s hard to predict what will happen this year, but he noted that the swing to positive margins will mean hotel companies are in a more comfortable position financially. “Where previously everyone was needing to pinch every dollar they could, they may start to feel more comfortable doing things like hiring and expanding, because they’re back to what they consider to be healthy profit margins,” he said. Average industry net profit margins in the two years before the recession were about 2 percent. Hotels.com, the online hotel reservation site, said last month its survey of price paid by customers on its website showed average hotel prices in North America increased 5 percent from 2010, continuing a steady recovery from lows in 2008. Other research and consulting firms have also said they expect gains in revPAR and average daily rates will continue to drive hotel revenues higher in the face of continued, moderate gains in occupancy. Advisory and real estate consulting firm PFK Consulting USA LLC said last month that a limited supply of new hotels coming on line is helping pricing at a time improved productivity is resulting in strong bottom-line gains. PFK expects the amount of new hotels coming on line over the next five years to be lower than the 2.1 percent average increase between 1988 and 2011, which should continue to help pricing. Higher oil prices shouldn’t have a big impact on travel, even though business travelers may be more apt to stay in lower-priced hotels, according to HotelNewsNow.com, a division of Smith Travel Research Inc. Privately held hotels aren’t the only ones benefiting from improving trends. Goldman Sachs analyst Steven Kent raised his rating on Wyndham Worldwide Corp. (NYSE:WYN) to buy from neutral last week, saying the hotel chain stands to gain from an improving U.S. economy, according to published reports. And shares of several publicly traded hotels, including Marriott International Inc. (NYSE:MAR) and Holiday Inn parent company InterContinental Hotel s Group PLC (NYSE:IHG), have outperformed the S&P 500 Stock Index so far this year. See the original post on Forbes.com here.

Apr05

CFO Corner: Trade-offs in growth, profits

Wai-Yan Sun, CFO of Boston-based technology and marketing firm FreeCause, discusses making trade-offs and the effort tied to cash flow forecasting. [More]

Mar30

Key cost metrics for hot industries

If you’ve been wondering what fields might be fertile for a new business, a good place to start is the Bureau of Labor Statistics’ new employment projections for 2010 to 2020. Sageworks examined several businesses that entrepreneurs might consider as they look to tap into the trends cited in the government’s employment outlook. [More]

Feb20

Private grocers’ margins unspoiled by higher food prices

Sageworks shows that private grocers and convenience stores generated higher gross profit margins and were able to generate a material increase in adjusted net profit margins for 2011. [More]