General Profile ......................................................................................................................................... 15
Financial Information ............................................................................................................................... 19
Compensation Information (Provided by PAS, Inc.) ................................................................................ 23
Best in Class Companies .............................................................................................................................. All Companies..........................................................................................................................................................................
Best in Class Industry Type Comparison ...................................................................................................... Industrial and Nonresidential ............................................................................................................................................... Heavy & Highway .................................................................................................................................................................. Specialty Trade ......................................................................................................................................................................
General Profile .............................................................................................................................................
Financial Information ...................................................................................................................................
General Profile .............................................................................................................................................
Financial Information ...................................................................................................................................
General Profile .............................................................................................................................................
Financial Information ...................................................................................................................................
Survey Methodology and Demographics ................................................................................................. 27
Key Ratio Definitions ............................................................................................................................... 28
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A B O U T T H E F I N A N C I A L B E N C H M A R K E R This year’s 2015 CFMA Financial Benchmarker Report (based on 2014 results) has been designed to provide easy-
to-understand guidelines for identifying business performance improvement opportunities. The overall purpose of this
report is to aid in identifying key industry operating statistics, multi-year trends, and financial benchmarks for industry
members and interested parties.
The 2015 CFMA Survey was prepared by Industry Insights, Inc. of Columbus, Ohio, while working closely with CFMA
staff and CFMA committee members in the design of the study. Confidential survey forms (refer to the Appendix for
a sample) were made available to CFMA members beginning in May, 2015. Respondents were able to submit their
survey forms through an online questionnaire or through a Microsoft Excel version of the survey.
This report includes comparative financial ratios and operations data. The information in this report has been
segmented by the top performing contractors (Best in class) based on a composite ranking of key financial ratios,
type of contractor, and sales volume.
A valuable feature of the 2015 CFMA Financial Benchmarker is that all companies participating in the survey have
the option to receive their confidential Company Performance Report (CPR) and personalized interactive tools that
are available through the 2015 CFMA Financial Benchmarker survey portal (www.financialbenchmarker.com). The
portal provides the ability to compare benchmarks from your organization against those of various comparison
groups.
The CPR displays each contractor’s own ratios and data computed in a manner consistent with those appearing in the
full report, and the results are displayed alongside the appropriate industry comparatives. As shown on any given
line of the Company Performance Report, a company’s own data are included along with reported norms for all
respondents and for companies of similar sales volume and region. Thus, the individual owner/manager is provided
invaluable information without needing to spend time and effort performing the calculations manually. In addition,
these highly confidential reports contain a graphical depiction of industry performance trends as well as a qualitative
assessment of a company's situation.
Sample Company Performance Report pages are shown on the following page.
In addition to receiving access to the Company Performance Report, participants will receive two free credits which
can be used toward an interactive “Customized Comparison” program that allows more specific information than any
single report could reasonably provide. Using the program, users are able to create their own data cuts to create
benchmarks that most closely match their organizations. For example, a user could create a data cut based on a
specific revenue size range and type of contractor (e.g., Heavy & Highway companies with less than $10 million in
revenue), whereas the report only provides single-level cuts (e.g., revenue size range or type of contractor). The
Customized Comparison program and other interactive data comparison tools are housed in the Financial
Benchmarker portal. Users are granted access to the portal on a variety of unique levels shown below (note: discounts
will be applied based on CFMA membership status).
Survey participant – Access to static CPR (Company Performance Report) and two free credits with the
option of purchasing additional credits or full subscription.
Participant/Purchased subscription – Access to all.
Non-participant/Purchased subscription – Access to all site features with the exception of the static CPR.
Non-participant/Non-Purchase – No access but will have the ability to purchase subscription or credits.
IN T R O D U C T I O N
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S A M P L E C O M P A N Y P E R F O R M A N C E R E P O R T The images on this page provide a sample of each of the sections that are included in participants’ Company
Performance Reports (CPR). The actual CPR that participants receive contains information about their organization,
compared against other similar companies and formatted as the pages below.
“YO U R F I R M ’ S” R A T I O S C O M P A R E D T O T H E A P P R O P R I A T E I N D U S T R Y N O R M S
A “R E P O R T C A R D”
E V A L U A T I O N O F Y O U R
O W N F I R M ’ S
P E R F O R M A N C E
T R E N D G R A P H A N A L Y S I S
S H O W S P E R F O R M A N C E O V E R
T I M E V E R S U S T H E I N D U S T R Y .
IN T R O D U C T I O N
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H O W T O U S E T H I S R E P O R T This 2015 CFMA Report has been designed to help construction companies evaluate their own performance relative
to that of similar companies in order to identify improvement opportunities. The statistics in this report represent
broad performance “yardsticks” against which a company's performance can be measured.
Using the information within this report, industry members can compare their own company’s financial performance
statistics against: Construction companies as a whole; companies of a comparable sales volume; companies of similar
type; and the best in class companies (the top 25% based on the composite ranking of key financial ratios). Spotting
significant differences between your own company’s performance and the comparable aggregates can be the first
step toward improving performance.
UNDERSTANDING THE DATA
In order to use the information in this report to its maximum advantage, it is important to understand how the data
are arranged and how to interpret the results.
HOW THE REPORT IS ORGANIZED
The survey results have been separated into 8 sections. Each section examines key findings through the use of some
textual analysis and a number of charts, graphs, and tables. The sections included in this year’s report include:
Respondent Profile – Provides an overview of key characteristics (e.g., size, region, etc.) of the companies
that participated in this year’s survey.
Overview of Survey Results – Provides an in-depth look at the overall responses to key questions
segmented by company type.
Best in Class – Provides a comparative analysis of the top 25% of companies based on a composite
ranking of selected financial ratios against selected aggregates.
Analysis by Company Type (Industrial & Nonresidential, Heavy & Highway, Specialty Trade) –
Examines key survey results and analysis segmented by company type. A respondent is determined to be of
a particular type based on the percentage of annual construction related revenue derived from a grouping
of NAICS codes. The NAICS codes were grouped into three major classifications: Industrial & Nonresidential,
Heavy & Highway, and Specialty Trade. The criteria for type classification is dependent on an estimated
revenue percentage of 50% or more for a particular grouping.
Multi-year Trend Comparison – Examines key financial ratios and metrics over a 7-year time period.
Hot Topic – The 2015 Hot Topic addresses the policies, implementation, and overall effectiveness of
methods regarding the employer/employee value proposition.
IN T R O D U C T I O N
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INTERPRETING THE NUMBERS
Most of the results included in this study are reported on the basis of medians rather than arithmetical averages or
means. Unlike the mean, the median is not distorted by a few unusually high or low values that may exist in the
sample due to special circumstances. The “median” value represents the mid-point of the data for a particular
measure, with one-half of the firms reporting figures above it and one-half below. Each median was computed
independently based on the companies that reported for that item. As a result, mathematical relationships do not
always exist when different ratios are used together in the calculation.
Lower 25% of
Reported
Figures
Middle 50% of Reported Figures
(or Middle Range)
Upper 25% of
Reported
Figures
Median
Figures reported were not used unless they were in accordance with the survey instructions and definitions. In cases
where the number of facilities reporting was considered inadequate for the computation of a meaningful figure, an
asterisk (*) notation is included to indicate insufficient data. At a minimum, 5 valid responses were required in order
to show any metrics.
Further insights into how to use this report are included in the Appendix in the section entitled: “Key Ratio Definitions.”
DISCLAIMER
The statistical information contained in this report is believed to be largely representative of the construction industry.
All reasonable efforts were taken by Industry Insights, Inc. to ensure data comparability within the limitations of basic
reporting procedures. However, the findings are based on those who chose to participate in this year’s survey, and
the sample was not adjusted to reflect any pre-determined profile expectations. Respondents’ data have not been
audited, and the statistical validity of any given number varies depending upon sample sizes and the amount of
consistency among responses. Industry Insights and CFMA, therefore, make no representations or warranties with
respect to the results of this study and shall not be liable for any information inaccuracies, or errors or omission in
contents, regardless of the cause of such inaccuracy, error or omission. In no event shall Industry Insights and/or CFMA
be liable for any consequential damages.
Largest Number
Reported
Smallest Number
Reported
Typical
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R E S P O N D E N T P R O F I L E
R E S P O N D E N T P R O F I L E
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O V E R V I E W
The statistics provided in this Respondent Profile Overview are based on the 520 participating organizations that
completed the 2015 survey. The results of prior surveys are sometimes referenced for purposes of trending.
In comparing the 2015 demographics statistics against the results of prior surveys, it should be taken into account that
while overall participation rates have remained steady, the overall sample of companies has varied from year to year.
Results could vary because of differences among the organizations, rather than true changes among years.
The typical company reported total annual sales of $52,382,000 for the 2014 fiscal year. The sales under $10 million
grouping encompasses 10.9% of responding companies and 8.7% of respondents reported sales of over $300 million.
Of the 469 companies that provided regional information, 32% were headquartered in the Far West. The Midwest was
the 2nd best represented region, with 22% of respondents. The remaining companies were relatively equally distributed
among the rest of the U.S. regions. Canadian and Foreign companies accounted for less than 1% of total companies.
Respondent type classification was determined based on the percentage of annual construction related revenue from
groupings of NAICS codes. The NAICS codes were grouped into three major classifications: Industrial & Nonresidential,
Heavy & Highway, and Specialty Trade. Type classification is based on an estimated revenue percentage greater than
50% for a particular grouping. Industrial & Nonresidential companies comprised the largest overall percentage of
companies at 41.9%, followed by Specialty trade (37.9%) and Heavy & Highway (19.4%).
S corporations were the legal business entity of 72.3% of responding organizations. The next most common form of legal
business entity was regular C Corporations, accounting for 16.1% of total participating companies.
The respondent profile results show that on average, 64.1% of responding companies’ annual construction related
revenue comes from the private sector, while 28.3% of companies’ annual revenues come from the state and local
government.
General/prime contractor was chosen as the primary role associated with the company by more than half (50.5%) of
total respondents. The primary role of subcontractor followed, with one-third of respondents choosing this option.
The best in class selection of companies for the 2015 study provides a comparative analysis of the top 25% of companies
based on a composite ranking of selected financial ratios against various aggregates. The 5 ratios included in the
rankings were: return on assets, return on equity, fixed assets ratio, debt to equity, and working capital turnover. All
ratios were equally weighted. In all, 130 companies were designated best in class companies. Of those selected, 56.2%
had annual 2014 sales of less than or equal to $50 million and the remaining 43.8% had sales greater than $50 million.
This is fairly consistent with the revenue distribution for all respondents.
The charts and tables on the following pages visually display the study’s key organization-level findings.
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Annual Sales Volume (All Companies)
Geographic Region of Headquarters (All Companies)
10.9%
19.6%
19.0%
21.2%
20.5%
8.7%
Sales Under $10 Million
$10-$25 Million
$25-$50 Million
$50-$100 Million
$100-$300 Million
Sales over $300 Million
32.2%
22.4%
14.7%
11.7%
9.4%
8.7%
0.6%
0.2%
Far West
Midwest
Southeast
Northeast
West
Southwest
Canada
Foreign (excluding Canada)
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Years in Business (All Companies)
Legal Form of Business (All Companies)
39.1%
42.1%
12.5%
4.1%
2.2%
>50 years
21-50 years
11-20 years
6-10 years
0-5 years
72.3%
16.1%
9.0%
2.6%
S Corporation
Regular C Corporation
LLC
Other
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Industry Sector (All Companies)
Percentage of annual construction-related revenue derived from each of the following sources
(All Companies)
41.9%
37.9%
19.4%
0.8%
Industrial & Nonresidential
Specialty Trade
Heavy & Highway
Other
64.1%
14.6%
13.7%
6.1%
1.4%
0.2%
Private Sector
Public Sector - State Government
Public Sector - Local Government
Public Sector - Federal Government
Self or Related Party
Public Sector - Foreign Government
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Primary role of company (All Companies)
Best in Class Selection—by Sales Volume
50.5%
33.2%
15.1%
1.1%
General/prime contractor
Subcontractor
Construction manager
Other
Less than $50 Million, 56.2%
$50 Million or more, 43.8%
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O V E R A L L S U R V E Y R E S U L T S
OV E R A L L S U R V E Y R E S U L T S
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O V E R V I E W
This section relays key survey results segmented by company type alongside all responding companies. A total of 520
companies submitted data for the 2015 CFMA Financial Benchmarker Report. Of those, 485 met the criteria for company
type classification. The percentage breakdown for Industrial & Nonresidential, Heavy & Highway, and Specialty Trade is
41.9%, 19.4%, and 37.9%, respectively. The remaining 0.8% of respondents were classified as ‘Other’.
GENERAL PROFILE
The number of S Corporations is significantly higher than C Corporations across all of the displayed aggregates. The
percentages of S-Corporations among company types are quite consistent, ranging from 74.7% of Heavy & Highway
companies to 72.1% of Industrial & Nonresidential companies.
Most of the survey participants are experienced contractors, with 81.2% of respondents indicating they have been in
business for over 20 years vs. only 6.3% indicating less than 10 years in business.
The private sector was the primary source of construction-related revenue for the average respondent. However, only
35.7% of Heavy & Highway companies’ revenue came from the private sector. When compared with the other groupings,
Heavy & Highway companies were generally more dependent on the state and local government as a source of
construction related revenue (27.8% and 26.6% respectively).
The most common type of contract performed by companies as a whole was a fixed price contract (lump-sum-hard bid)
(39.6%). Specialty Trade companies had the highest overall percentage of fixed price contracts at 50.3% of all
contracts, while Industrial & Nonresidential companies performed this type of contract only 29% of the time. Most
contracts (53.3%) last less than 1 year. The rate of contracts less than 1 year varies by type, with Specialty trade
companies reporting that 73.1% of their projects are completed within a year, compared to 43.7% for Industrial and
Nonresidential and 38.7% for Heavy & Highway. Of all the segments, Heavy & Highway companies account for the
highest percentage of contracts lasting more than 2 years (5.3%).
FINANCIAL INFORMATION
Liquidity Ratios
Most liquidity ratios ratio remained fairly consistent among the company type aggregates. However, the Days of Cash
metric varied considerably among groups, ranging from a low of 10.7 (Specialty Trade) to a high of 21.8 (Heavy &
Highway).
Profitability Ratios
The return on assets figure for the typical respondent was 6.9%. The data show that Specialty Trade companies are most
effectively utilizing assets to generate profit with a return on assets metric of 10.1%. The Industrial and Nonresidential
aggregate experienced the lowest overall ROA of 4.9%.
Leverage Ratios
With a debt to equity ratio of 2.8, Industrial & Nonresidential companies exceed the other company types by more than
two times. The typical respondent reported a debt to equity ratio of 1.9.
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Efficiency Ratios
Industrial & Nonresidential companies reported the lowest overall days required to complete a normal operating cycle
(26.3 days) of the company types. Specialty Trade companies, on the other hand, required the most time (49.4 days).
The typical respondent reported an operating cycle of 35.3 days.
Productivity Ratios
The Industrial & Nonresidential grouping experienced a significantly higher revenue per FTE, and gross profit per FTE
compared against the company type groupings ($772,610, $55,848). The typical respondent reported revenue and
gross profit per FTE of $390,448 and $44,384, respectively.
Summary Financial Metrics
The typical respondent reported a gross margin of 13.1% on $134 million in revenue, and it achieved a net income of
3.1%. Specialty Trade companies experienced net income of 4.3% on sales of $78 million which is highest among the
company type groupings. The data show that an inverse relationship may exist between gross profit and total annual
revenue.
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G E N E R A L P R O F I L E
Legal Form of the Business Entity
Primary Role of Company
Years in Business (All Companies)
16.1% 12.7% 16.5% 19.1%
72.3% 72.1% 74.7% 72.3%
9.0% 10.7% 8.8% 7.5%2.6% 4.6%
0.0% 1.2%
All Companies Industrial andNonresidential
Heavy & Highway Specialty Trade
Regular C corporation S corporation Limited liability company Other
50.5%63.6%
89.5%
16.2%
33.2%
0.7%9.2%
80.9%
15.1%
34.4%
0.0% 1.5%1.1% 1.3% 1.3% 1.5%
All Companies Industrial andNonresidential
Heavy & Highway Specialty Trade
General/prime contractor Subcontractor Construction manager Other
6.3% 7.2% 5.3% 5.2%
12.5% 13.1% 14.5%11.9%
42.1%39.2% 40.8%
45.9%
39.1% 40.5%39.5% 37.0%
All Companies Industrial andNon-Residential
Heavy & Highway Specialty Trade
0-10 years 11-20 years 21-50 years >50 years
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Percentage of annual construction-related revenue earned in the geographic regions below
All Companies
Industrial & Nonresidential
Heavy & Highway
Specialty Trade
(N) 361 152 76 134
Midwest 25.8% 27.2% 25.3% 25.3%
Far West 16.7% 14.7% 19.8% 17.9%
Southeast 16.1% 15.7% 20.3% 13.0%
Northeast 15.3% 13.3% 16.8% 17.3%
Southwest 12.4% 14.9% 11.2% 10.2%
West 12.2% 11.6% 5.7% 15.8%
Canada 1.1% 1.9% 0.8% 0.4%
Foreign (excluding Canada) 0.3% 0.7% 0.0% 0.1%
Percentage of annual construction-related revenue derived from each of the following sources
All Companies
Industrial & Nonresidential
Heavy & Highway
Specialty Trade
(N) 360 152 76 135
Private Sector 64.1% 69.9% 35.7% 73.8%
Public Sector - State Government 14.6% 11.1% 27.8% 10.8%
Public Sector - Local Government 13.7% 11.9% 26.6% 8.6%
Public Sector - Federal Government 6.1% 4.1% 9.4% 6.0%
Self or Related Party 1.4% 2.4% 0.6% 0.8%
Public Sector - Foreign Government 0.2% 0.5% 0.0% 0.0%
Percentage of contract types performed by companies All
Companies Industrial &
Nonresidential Heavy & Highway
Specialty Trade
(N) 361 152 76 135
Fixed price (lump-sum - hard bid) 39.6% 29.1% 42.6% 50.3%
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F I N A N C I A L I N F O R M A T I O N
Key ratios – all shown as medians except “inventory days”
All Companies All Industrial & Nonresidential
All Heavy & Highway All Specialty Trade
Number of Participants 449 192 88 169
Liquidity Ratios
Current Ratio 1.4 1.3 1.6 1.7
Quick Ratio 1.3 1.2 1.3 1.5
Days of Cash 17.5 19.6 21.8 10.7
Working Capital Turnover 11.5 15.8 9.6 7.6
Profitability Ratios
Return on Assets 6.9% 4.9% 6.9% 10.1%
Return on Equity 19.0% 20.5% 13.8% 20.5%
Times Interest Earned 22.0 25.7 9.6 23.1
Leverage Ratios
Debt to Equity 1.9 2.8 1.2 1.2
Revenue to Equity 7.9 13.4 5.2 6.0
Asset Turnover 2.8 3.3 2.2 2.7
Fixed Asset Ratio 27.9% 18.8% 58.5% 26.8%
Equity to SG&A Expenses 1.5 1.3 2.7 1.4
Underbillings to Equity 11.4% 11.7% 7.6% 12.0%
Average Backlog to Equity 4.5 9.8 2.8 2.3
Efficiency Ratios
Average Backlog to Working Capital 5.9 12.4 5.5 3.2
Average Months in Backlog 7.1 8.9 7.6 5.5
Days in Accounts Receivable 53.8 46.8 45.4 61.3
Days in Inventory 3.4 1.6 6.5 3.7
Days in Accounts Payable 35.6 42.7 30.4 27.9
Operating Cycle 35.3 26.3 46.2 49.4
Productivity Ratios
Revenue per FTE Employee $390,448 $772,610 $388,030 $228,475
Gross Profit per FTE Employee $44,384 $55,848 $37,274 $38,242
Revenue per Production FTE Employee $489,186 $1,090,235 $481,687 $299,407
Gross Profit per Production FTE Employee $60,570 $79,665 $54,392 $49,360
Summary Financial Metrics (Dollar figures are shown in 000's)
Total Assets $54,720 $61,823 $74,354 $35,419
Total Liabilities $35,312 $45,621 $40,376 $20,160
Total Net Worth $19,362 $16,180 $34,035 $15,134
Total Revenue $133,712 $177,023 $143,415 $78,363
Gross Profit $12,169 $10,734 $13,495 $12,408
Gross Profit (%) 13.1% 8.6% 12.4% 18.3%
Total SG&A Expenses $9,007 $8,385 $9,729 $8,987
Total SG&A Expenses (%) 10.0% 6.9% 9.2% 13.9%
Income (Loss) from Operations $3,162 $2,349 $3,766 $3,421
Income (Loss) from Operations (%) 3.1% 1.7% 3.2% 4.4%
Net Income (Loss) Before Income Taxes $3,369 $2,527 $4,658 $3,310
Net Income (Loss) Before Income Taxes (%) 3.1% 1.8% 3.5% 4.3%
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All Companies
All Companies - By Sales Volume
Under $10
Million $10-25 Million
$25 - 50 Million
$50 - 100 Million
$100-300 Million
Over $300
Million
Number of Participants 449 45 87 84 95 92 39
Liquidity Ratios
Current Ratio 1.4 1.9 1.6 1.4 1.4 1.4 1.4
Quick Ratio 1.3 1.8 1.4 1.3 1.3 1.2 1.2
Days of Cash 17.5 16.5 13.1 21.1 19.1 11.1 14.8
Working Capital Turnover 11.5 6.2 10.7 11.6 12.2 13.3 11.4
Profitability Ratios
Return on Assets 6.9% 10.7% 8.0% 8.7% 5.8% 6.0% 4.5%
Return on Equity 19.0% 16.2% 21.3% 23.9% 16.2% 18.1% 15.6%
Times Interest Earned 22.0 14.4 19.8 29.7 19.6 22.4 21.4
Leverage Ratios
Debt to Equity 1.9 1.0 1.5 1.9 1.9 2.4 2.5
Revenue to Equity 7.9 4.8 7.1 9.3 7.8 9.0 9.2
Asset Turnover 2.8 2.5 2.8 3.2 2.8 2.9 2.7
Fixed Asset Ratio 27.9% 31.3% 29.7% 29.9% 22.9% 27.1% 23.2%
Income (Loss) from Operations $3,162 $183 $681 $1,291 $1,736 $4,882 $15,994
Income (Loss) from Operations (%) 3.1% 2.9% 3.8% 3.6% 2.4% 2.8% 2.6%
Net Income (Loss) Before Income Taxes $3,369 $186 $694 $1,297 $1,811 $5,123 $17,576
Net Income (Loss) Before Income Taxes (%) 3.1% 2.9% 3.8% 3.6% 2.5% 2.9% 2.7%
OV E R A L L S U R V E Y R E S U L T S
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All
Companies
All Companies - By Geographic Region
Northeast Southeast Midwest Southwest West Far West
Number of Participants 449 52 62 96 37 39 147
Liquidity Ratios
Current Ratio 1.4 1.4 1.5 1.4 1.4 1.6 1.4
Quick Ratio 1.3 1.3 1.3 1.3 1.3 1.3 1.3
Days of Cash 17.5 15.4 16.3 14.1 22.0 19.5 18.1
Working Capital Turnover 11.5 12.7 10.3 11.6 11.8 11.1 11.4
Profitability Ratios
Return on Assets 6.9% 5.0% 6.8% 8.5% 4.7% 10.6% 7.7%
Return on Equity 19.0% 15.9% 19.3% 19.8% 13.7% 27.1% 20.8%
Times Interest Earned 22.0 12.7 30.5 21.4 30.4 27.5 17.5
Leverage Ratios
Debt to Equity 1.9 1.8 1.9 2.0 2.3 1.5 1.9
Revenue to Equity 7.9 7.2 7.6 9.5 8.2 8.4 7.8
Asset Turnover 2.8 2.6 3.0 2.9 2.7 3.2 2.6
Fixed Asset Ratio 27.9% 21.2% 29.7% 31.4% 23.8% 27.4% 27.6%
Income (Loss) from Operations $3,162 $5,423 $1,887 $4,059 $1,905 $3,396 $2,579
Income (Loss) from Operations (%) 3.1% 3.1% 3.0% 3.1% 1.9% 3.7% 3.2%
Net Income (Loss) Before Income Taxes $3,369 $5,310 $2,084 $4,408 $3,255 $3,659 $2,543
Net Income (Loss) Before Income Taxes (%) 3.1% 3.2% 3.1% 3.1% 2.1% 3.7% 3.2%
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All Companies
Best In Class
All Companies
Less than $50 Million
$50 Million or More
Number of Participants 449 130 73 57
Liquidity Ratios
Current Ratio 1.4 1.6 1.6 1.4
Quick Ratio 1.3 1.4 1.6 1.3
Days of Cash 17.5 18.0 20.7 14.6
Working Capital Turnover 11.5 12.0 11.4 13.6
Profitability Ratios
Return on Assets 6.9% 17.4% 18.9% 15.5%
Return on Equity 19.0% 45.5% 42.9% 49.0%
Times Interest Earned 22.0 79.3 85.2 69.8
Leverage Ratios
Debt to Equity 1.9 1.5 1.1 2.2
Revenue to Equity 7.9 9.2 7.4 10.1
Asset Turnover 2.8 3.4 3.5 3.2
Fixed Asset Ratio 27.9% 14.9% 16.5% 14.6%
Equity to SG&A Expenses 1.5 1.5 1.5 1.4
Underbillings to Equity 11.4% 10.3% 10.3% 10.4%
Average Backlog to Equity 4.5 4.0 2.2 6.6
Efficiency Ratios
Average Backlog to Working Capital 5.9 5.6 3.5 9.2
Average Months in Backlog 7.1 6.3 4.5 8.4
Days in Accounts Receivable 53.8 48.2 46.9 49.5
Days in Inventory 3.4 2.3 2.9 1.5
Days in Accounts Payable 35.6 26.0 23.7 27.9
Operating Cycle 35.3 37.5 37.6 35.1
Productivity Ratios
Revenue per FTE Employee $390,448 $396,501 $347,845 $616,189
Gross Profit per FTE Employee $44,384 $59,549 $56,083 $61,339
Revenue per Production FTE Employee $489,186 $528,016 $499,770 $770,236
Gross Profit per Production FTE Employee $60,570 $79,665 $72,738 $84,931
Summary Financial Metrics (Dollar figures are shown in 000's)
Total Assets $54,720 $35,096 $7,120 $70,924
Total Liabilities $35,312 $20,592 $3,530 $42,444
Total Net Worth $19,362 $14,536 $3,585 $28,560
Total Revenue $133,712 $93,640 $22,483 $184,772
Gross Profit $12,169 $13,022 $3,570 $25,127
Gross Profit (%) 13.1% 15.7% 17.8% 13.0%
Total SG&A Expenses $9,007 $7,110 $2,129 $13,490
Total SG&A Expenses (%) 10.0% 9.5% 11.2% 7.3%
Income (Loss) from Operations $3,162 $5,911 $1,441 $11,637
Income (Loss) from Operations (%) 3.1% 6.3% 6.7% 5.8%
Net Income (Loss) Before Income Taxes $3,369 $5,946 $1,475 $11,672
Net Income (Loss) Before Income Taxes (%) 3.1% 6.4% 6.8% 5.9%
OV E R A L L S U R V E Y R E S U L T S
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C O M P E N S A T I O N D A T A
POSITION DESCRIPTIONS RISK MANAGER Plans, coordinates and directs the corporate control, risk funding, and insurance program to minimize losses. Analyzes and classifies risks according to frequency and potential severity, measuring financial impact of risk on company. Evaluates and selects techniques to minimize losses such as risk retention, risk transfer, etc. Administers corporate bonding and insurance programs including evaluating and selecting brokers-carriers, and negotiating insurance coverage. Investigates and participates in settlement of major loss claims. ACCOUNTANT I Under direction of supervisor, coordinates preparation of payroll, processing of invoices, timekeeping, maintaining equipment reports, and the like. Assists in the internal auditing of the accounting and administrative functions. Assists in the preparation of cash flow statements, general ledgers, reconciliations, etc. May supervise small clerical staff. Position normally requires a 4-year degree in accounting and 1 year experience. ACCOUNTANT II Develops and maintains all accounting functions at a project, preparing budgets, processing invoices, maintaining general ledgers, accounting reconciliations and the like. May direct junior staff who perform these functions. Conducts internal audits to insure good accounting practices are followed on-site. Position normally requires 2-4 years of construction accounting experience. ACCOUNTING SUPERVISOR Plans, monitors and supervises one or more accounting sections or activities such as payroll, accounts payable, accounts receivable, and data control. Prepares or supervises preparation of reconciliations, client invoices, ledger sheets, etc. Makes practical applications interpretations of accounting procedures and standards for routine transactions and special or unusual situations arising within the department. Position normally requires 5-6 years of related experience. ACCOUNTING MANAGER Plans, implements and supervises all accounting functions for several small-medium size projects or one large, complex project. Provides expertise to establish accounting systems and implements accounting standards and procedures based on contract requirements. Responsible for all financial/accounting ledgers, transactions, audits, reconciliations, etc., affecting project(s). Monitors procedures and systems to insure accurate and timely transactions at the most economical cost.
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OFFICE MANAGER I Develops and maintains all accounting and administrative functions at a project including the preparation of payroll, accounts payable, equipment rental, expendable material purchases, and receiving. May be responsible for preparing pay estimates, cost reports, monitoring subcontractor costs, new employee sign-ups, and the preparation of backcharges. Multiple role position. OFFICE MANAGER II Plans and directs all administrative and accounting functions on assigned project including personnel, expendable material purchasing, cost control, receiving, and the like. Directs and/or prepares payroll, accounts payable, reconciliations, backcharges, and field invoices. May direct office administrative staff.
EXECUTIVE VICE PRESIDENT Number two operating officer accountable for the full range of operations or officer responsible for a major, multi-disciplined work segment of the company. VICE PRESIDENT/CHIEF FINANCIAL OFFICER Responsible for the entire range of financial activity of the company including both the treasury and accounting functions. CONTROLLER Provides direction for the entire range of financial activity of a smaller company or a major segment of the financial/accounting functions of a medium to large firm.
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ACCOUNTING CLERK I Under immediate supervision computes, matches, balances, verifies, posts and summarizes routine documents. Reviews invoices, bills, vouchers, or other documents for corrections before entering into records. Entry level position in the accounting department normally requiring 0 years of experience. ACCOUNTING CLERK II Performs variety of accounting clerical tasks. Assists in the preparation and reconciliation of various reports. Checks documentation for accuracy, cost code, and verification of transaction entries. Requires 2 to 4 years of experience. ACCOUNTING CLERK III Performs a variety of non-routine accounting clerical tasks. Summarizes and posts data to journals, ledgers, and accounts. Reconciles bank accounts; checks, journal entries, and other accounting records, and verifies. Senior level clerical position in the accounting department requiring 5 or more years of related experience. ACCOUNTS PAYABLE CLERK I Performs routine accounting practices to process accounts payable. Receive and match invoices to purchase orders, requisitions, and receiving documentation. Responsible for checking accuracy, scheduling for payment, generating checks, and processing for payment. Requires 1 to 2 years of general accounting experience. ACCOUNTS PAYABLE CLERK II Performs advanced accounting practices to process accounts payable. Processes invoices by matching to purchase orders, requisitions, scheduling for payment, applying cost coding, generating checks, and posting. Investigates and resolves questions or discrepancies with vendors and subs. Requires 3 to 5 years of accounts payable experience. ACCOUNTS RECEIVABLE CLERK I Performs routine accounting practices to process accounts receivable. Receives payments, check accuracy, prepare bank deposits, performs reconciliations, and post to journals/ledgers. Follows established procedures for processing receipts, cash etc. Requires 1 to 2 years of general accounting experience. ACCOUNTS RECEIVABLE CLERK II Performs advanced accounting practices to process accounts receivable. May receive payments, check accuracy, prepare bank deposits, apply cost coding, and post to journals/ledgers. Investigates and resolves questions or discrepancies with customers. Requires 3 to 5 years of accounts receivable experience.
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ACCOUNTS PAYABLE / RECEIVABLES SUPERVISOR Supervises the accounts payable and/or accounts receivable process within the company’s established procedures. Directs invoice processing and verification, preparation of checks or direct payments, receipt of payments, etc. Requires 6 or more years of AP/AR experience. PAYROLL CLERK I Performs routine practices to assist in payroll preparation. Responsible for maintaining basic payroll records such as time worked, rate changes, overtime, vacations and the like. Assist’s in the processing of time cards, timekeeping activities, manual checks, bank reconciliation, and payroll balancing. Requires 1 to 2 years of general accounting experience. PAYROLL CLERK II Performs all required functions necessary to compute and prepare payrolls and associated reports. Responsible for calculating and preparing hourly and salary payroll, deductions, insurance, taxes, and other withholding. Balances and posts payroll summaries, reconciling with overall accounting records. Prepares required withholding reports, tax statements, etc. Requires 3 to 5 years of payroll experience. PAYROLL SUPERVISOR Oversees the preparation, distribution, and reporting processes of the company’s hourly/salaried payrolls for single or multiple locations. Ensures calculation of wages, overtime, and all deductions comply with federal and state laws and wage payments and other withholding payments are disbursed appropriately. Requires 6 years of payroll experience. OFFICE MANAGER, HOME OFFICE Maintains all basic accounting and administrative functions at the home office. Responsible for AP/AR, pay estimates, cost reports, new employee sign-ups, payroll, equipment rental, etc. Supervises work of administrative personnel. Multiple role position. Requires 5 years of related accounting and administrative experience.
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DEFINITIONS Base Salary: Base salary of all companies reporting for a particular position. Does not include bonus, incentive, or additional forms of extra compensation. Bonus/Cash Incentives: The amount of additional cash compensation provided in the form of a bonus / cash incentive. Does not include deferred profit sharing or deferred bonus and is only reported for those companies granting a bonus. Total Cash Compensation: Base salary plus any bonus / cash incentive amount for all companies reporting for a particular position. Includes both bonus paying and non-bonus paying companies. 25th Percentile: Value within the sample which is higher than 25% and lower than 75% of the rates reported. 50th Percentile: Value within the sample which is higher (Median) than 50% and lower than 50% of the rates reported. 75th Percentile: Value within the sample which is higher than 75% and lower than 25% of the rates reported. Average: The sum of the average rate reported by each company divided by the number of companies in the sample. Note: All numbers are base salary unless identified as Bonus/Cash Incentive or Total Cash Compensation. General Salary surveys offer a summary look at external market data for selected benchmark positions in the construction industry. These surveys typically reflect multiple demographic slices of compensation information by type contractor, type of construction performed, geographical location, organizational type, bid type, and revenue size of the company. Review of survey data facilitates job pay comparisons that reflects the labor force from which your company recruits employees. Though not meant to be all inclusive, the following wage tables provide a starting point to identify “market values” in the construction industry. Use of the Data In reviewing the salary and bonus data, consider the information as a general indicator of the compensation practices of contractors. Factors not covered by the survey demographics such as your company's organizational structure, economic conditions of your area, and the like need to be considered in evaluating the survey data and how it applies to you. For executive and professional positions, company revenue size is a key demographic in evaluating compensation, hence the break-out by revenue size. Support and clerical positions tend to be more localized in nature. For accounting support positions, consider your local area practices. In all cases, you must temper the survey information to meet the uniqueness of your company.
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As economic conditions continue to be challenging, contractor revenue sizes have fluctuated and subsequently impacted survey results when compared to previous years. In some cases, the mix of companies may have changed dramatically from prior years. Review data in the rows above and below your selection to identify the best fit for your firm. Sources: 2014 Executive Compensation Survey for Contractors 2014 Construction / Construction Management Staff Salary Survey 2013 Construction Support Staff Salary Survey
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Accounting and Financial Compensation Data Median 25th 50th 75th Percentile Percentile Average Percentile Accountant I Base Salary 37,014 40,133 41,589 46,565 Bonus / Cash Incentive 1,000 1,500 2,023 2,496 Total Cash Compensation 37,370 41,550 42,601 47,183 Base Salary by Revenue Size 5 to 25 Million 32,000 37,014 37,319 39,158 25 to 100 Million 37,114 39,999 40,542 43,183 100 to 250 Million 39,500 42,053 42,815 45,368 Over 250 Million 41,240 47,130 47,027 50,960 Accountant II 45,000 50,593 52,209 58,999 Base Salary 1,600 2,300 3,481 4,505 Bonus / Cash Incentive 45,967 52,077 54,033 60,862 Total Cash Compensation Base Salary by Revenue Size 5 to 25 Million 40,000 46,334 45,811 50,000 25 to 100 Million 45,690 52,000 52,126 58,500 100 to 250 Million 48,193 51,375 54,028 60,180 Over 250 Million 51,360 60,274 59,556 67,669 Accounting Supervisor Base Salary 53,750 64,500 63,832 72,821 Bonus / Cash Incentive 1,800 4,000 4,863 5,000 Total Cash Compensation 56,144 67,000 66,496 77,381 Base Salary by Revenue Size 5 to 25 Million 42,830 48,607 51,432 58,900 25 to 100 Million 55,000 65,000 65,277 71,180 100 to 250 Million 60,475 67,252 68,602 73,590 Over 250 Million 66,912 72,423 72,882 80,000 Accounting Manager Base Salary 70,000 85,000 84,196 95,000 Bonus / Cash Incentive 4,724 8,000 9,432 12,000 Total Cash Compensation 72,800 90,000 89,670 104,200 Base Salary by Revenue Size 5 to 25 Million 60,008 72,000 74,798 90,000 25 to 100 Million 72,555 85,136 87,038 94,300 100 to 250 Million 76,730 90,302 90,698 106,920 Over 250 Million 85,667 93,345 93,412 103,870
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Median 25th 50th 75th Percentile Percentile Average Percentile Risk Manager Base Salary 85,021 99,562 108,610 130,557 Bonus / Cash Incentive 5,040 12,500 16,155 22,386 Total Cash Compensation 92,346 109,690 120,457 148,259 Base Salary by Revenue Size 5 to 25 Million *** *** *** *** 25 to 100 Million *** *** 104,728 *** 100 to 250 Million *** *** 94,727 *** Over 250 Million 87,521 115,638 114,051 132,807 Controller Base Salary 85,109 103,590 104,590 119,700 Bonus / Cash Incentive 9,225 14,000 21,871 28,500 Total Cash Compensation 92,492 110,209 120,189 132,680 Base Salary by Revenue Size 5 to 25 Million 72,300 80,450 84,134 93,000 25 to 100 Million 87,500 104,550 103,785 115,381 100 to 250 Million 93,000 105,425 108,270 124,050 Over 250 Million 105,000 125,000 122,033 139,500 Chief Financial Officer Base Salary 119,955 153,667 166,907 207,500 Bonus / Cash Incentive 23,193 55,000 72,834 110,000 Total Cash Compensation 130,016 190,000 216,363 265,000 Base Salary by Revenue Size 5 to 25 Million 90,720 110,498 113,483 138,364 25 to 100 Million 120,455 137,155 149,628 190,000 100 to 250 Million 150,455 189,248 187,930 223,300 Over 250 Million 188,100 209,000 228,998 253,750 Executive Vice President Base Salary 150,000 187,900 201,407 242,030 Bonus / Cash Incentive 34,200 107,150 137,856 190,830 Total Cash Compensation 174,000 246,695 298,279 370,580 Base Salary by Revenue Size 5 to 25 Million 121,000 145,000 143,042 164,750 25 to 100 Million 154,500 184,156 191,444 220,000 100 to 250 Million 181,000 216,150 223,329 252,408 Over 250 Million 230,100 277,960 278,741 313,500
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Median 25th 50th 75th Percentile Percentile Average Percentile Field Office Manager I Base Salary 36,069 42,622 44,632 52,016 Bonus / Cash Incentive 1,040 2,000 3,104 2,900 Total Cash Compensation 37,040 43,492 46,224 54,920 Base Salary by Revenue Size 5 to 25 Million 35,000 40,000 40,834 43,000 25 to 100 Million 36,456 44,800 45,958 53,619 100 to 250 Million *** *** 50,890 *** Over 250 Million 47,000 53,500 52,204 57,695 Field Office Manager II Base Salary 49,826 60,411 59,728 69,000 Bonus / Cash Incentive 2,800 3,750 4,770 5,477 Total Cash Compensation 51,700 63,275 62,265 72,000 Base Salary by Revenue Size 5 to 25 Million 44,450 49,650 51,837 60,084 25 to 100 Million 47,655 56,631 56,986 66,504 100 to 250 Million *** *** 67,608 *** Over 250 Million 59,956 64,870 66,510 73,470 Accounting Clerk I Base Salary 27,300 32,894 31,688 36,648 Bonus / Cash Incentive 525 1,000 1,060 1,400 Total Cash Compensation 27,300 32,894 31,986 37,100 Base Salary by Revenue Size 5 to 25 Million *** *** 29,265 *** 25 to 100 Million 23,938 30,420 29,617 34,046 100 to 250 Million *** *** 31,441 *** Over 250 Million 31,790 36,610 34,344 37,253 Accounting Clerk II Base Salary 35,830 41,411 41,701 46,856 Bonus / Cash Incentive 875 1,833 2,231 3,110 Total Cash Compensation 36,046 41,985 42,687 48,600 Base Salary by Revenue Size 5 to 25 Million *** *** 33,057 *** 25 to 100 Million 36,970 42,409 45,120 49,250 100 to 250 Million 34,069 40,706 40,663 48,500 Over 250 Million 37,572 44,710 43,197 47,928
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Median 25th 50th 75th Percentile Percentile Average Percentile Accounting Clerk III Base Salary 43,240 50,727 51,111 55,200 Bonus / Cash Incentive 1,149 1,950 2,831 3,970 Total Cash Compensation 44,050 51,000 52,678 57,498 Base Salary by Revenue Size 5 to 25 Million *** *** 50,336 *** 25 to 100 Million 41,378 50,750 51,414 57,600 100 to 250 Million 47,000 50,727 52,676 57,735 Over 250 Million 44,050 50,908 51,681 54,711 Accounts Payable Clerk I Base Salary 30,500 32,240 34,314 38,233 Bonus / Cash Incentive 950 1,100 1,664 2,000 Total Cash Compensation 30,600 33,670 34,829 39,044 Base Salary by Revenue Size 5 to 25 Million *** *** 35,834 *** 25 to 100 Million 26,000 32,240 30,502 35,000 100 to 250 Million 31,200 31,540 36,241 42,070 Over 250 Million 30,000 34,356 35,061 39,187 Accounts Payable Clerk II Base Salary 36,695 39,892 41,495 46,271 Bonus / Cash Incentive 1,250 2,077 2,551 3,750 Total Cash Compensation 37,310 41,501 42,804 49,176 Base Salary by Revenue Size 5 to 25 Million 37,400 39,100 40,632 40,000 25 to 100 Million 36,500 39,984 40,883 45,760 100 to 250 Million 36,670 40,192 42,007 50,000 Over 250 Million 38,416 41,458 42,594 46,643 Accounts Receivable Clerk I Base Salary 29,120 35,400 35,339 43,725 Bonus / Cash Incentive *** *** 2,381 *** Total Cash Compensation 29,320 36,272 35,974 43,725 Base Salary by Revenue Size 5 to 25 Million *** *** *** *** 25 to 100 Million *** *** 32,040 *** 100 to 250 Million *** *** 39,737 *** Over 250 Million *** *** 33,612 ***
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Median 25th 50th 75th Percentile Percentile Average Percentile Accounts Receivable Clerk II Base Salary 36,467 42,394 44,252 49,864 Bonus / Cash Incentive 1,500 2,450 2,668 3,000 Total Cash Compensation 37,143 44,244 45,586 51,800 Base Salary by Revenue Size 5 to 25 Million *** *** 43,849 *** 25 to 100 Million 37,773 40,744 43,036 49,017 100 to 250 Million 34,701 42,800 44,882 46,145 Over 250 Million 38,127 45,208 45,357 51,327 Accounts Payable / Rec. Supervisor Base Salary 49,000 58,580 59,657 67,000 Bonus / Cash Incentive 2,000 4,489 4,968 7,300 Total Cash Compensation 49,982 63,000 62,104 69,900 Base Salary by Revenue Size 5 to 25 Million *** *** 58,484 *** 25 to 100 Million 48,063 54,000 55,442 60,000 100 to 250 Million 56,724 61,766 61,839 69,700 Over 250 Million 54,275 63,600 62,888 68,120 Payroll Clerk I Base Salary 32,620 38,115 39,550 42,051 Bonus / Cash Incentive 717 1,000 1,737 2,801 Total Cash Compensation 33,650 38,125 40,189 44,126 Base Salary by Revenue Size 5 to 25 Million *** *** 36,599 *** 25 to 100 Million 33,280 36,482 39,587 43,088 100 to 250 Million 35,000 38,480 40,809 40,170 Over 250 Million 34,990 39,418 40,194 45,255 Payroll Clerk II Base Salary 39,800 42,100 45,142 52,200 Bonus / Cash Incentive 1,650 2,500 2,758 3,729 Total Cash Compensation 40,044 43,900 46,308 53,100 Base Salary by Revenue Size 5 to 25 Million 39,900 40,770 40,008 42,250 25 to 100 Million 39,811 46,151 47,770 54,070 100 to 250 Million 38,116 42,800 43,075 48,635 Over 250 Million 39,555 42,812 46,512 53,805
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Median 25th 50th 75th Percentile Percentile Average Percentile Payroll Supervisor Base Salary 51,300 57,700 59,792 65,160 Bonus / Cash Incentive 1,875 3,740 4,202 5,600 Total Cash Compensation 53,560 60,500 61,863 68,570 Base Salary by Revenue Size 5 to 25 Million *** *** 52,570 *** 25 to 100 Million 49,492 54,280 56,296 64,000 100 to 250 Million 49,175 55,000 55,053 60,000 Over 250 Million 58,864 65,000 68,326 75,900 Home Office Manager Base Salary 49,920 60,000 60,282 75,000 Bonus / Cash Incentive 2,000 4,724 5,751 7,000 Total Cash Compensation 50,300 61,200 63,016 76,066 Base Salary by Revenue Size 5 to 25 Million 48,360 57,620 58,759 67,250 25 to 100 Million 50,300 58,000 60,350 75,000 100 to 250 Million 49,452 65,202 61,550 72,434 Over 250 Million 64,000 66,000 70,348 77,500
AP P E N D I X
2015 CFMA F I N A N C I A L B E N C H M A R K E R R E P O R T (A N A L Y S I S O F 2014 R E S U L T S ) W W W . F I N A N C I A L B E N C H M A R K E R .C O M
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A P P E N D I X
AP P E N D I X
2015 CFMA F I N A N C I A L B E N C H M A R K E R R E P O R T (A N A L Y S I S O F 2014 R E S U L T S ) W W W . F I N A N C I A L B E N C H M A R K E R .C O M
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S U R V E Y M E T H O D O L O G Y A N D D E M O G R A P H I C S
In early 2015 Industry Insights, Inc. distributed strictly confidential questionnaires to all CFMA members. The primary
intent of this survey was to collect detailed financial and operating information from construction contractors by
specific sales volume size, company type, and other data aggregations of importance.
Once the questionnaires were received by Industry Insights, a confidential company identification code was assigned
to each company. The data was then coded, entered into a proprietary system and edited by Industry Insights’
financial analysts for accuracy and consistency.
In all, 520 questionnaires were received by Industry Insights. In particular, the statistical sample consists of the
following:
Number of
Respondents
All CFMA companies ................................................................................................................................................. 520
Best in class companies ............................................................................................................................................. 130
Best in class – by sales volume:
Less Than $50 Million .................................................................................................................................. 73
$50 Million or more ..................................................................................................................................... 57
Heavy & Highway ....................................................................................................................................... 94
Other ................................................................................................................................................................ 4
Heavy & Highway ....................................................................................................................................... 24
Less Than $10 Million .................................................................................................................................. 49
$10-$25 Million ........................................................................................................................................... 88
$25-$50 Million ........................................................................................................................................... 85
$100-$300 Million ...................................................................................................................................... 92
Over $300 Million ....................................................................................................................................... 39
Region:
Northeast U.S. ............................................................................................................................................... 55
Southeast U.S. ............................................................................................................................................... 69
Midwest U.S. .............................................................................................................................................. 105
Southwest U.S. ............................................................................................................................................... 41
West U.S. ....................................................................................................................................................... 44
Far West U.S. ............................................................................................................................................. 151
2015 CFMA F I N A N C I A L B E N C H M A R K E R R E P O R T (A N A L Y S I S O F 2014 R E S U L T S ) W W W . F I N A N C I A L B E N C H M A R K E R .C O M
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K E Y R A T I O D E F I N I T I O N S
The primary purpose of this 2015 CFMA Report is to provide a basis for comparing your own performance with your
peers. In order to do this, it is necessary to calculate your own ratios using the same methods that were used to
compute the ratios in this report. These definitions appear on the pages that follow.
To further clarify the computational process, this section of the report also contains a copy of the survey questionnaire
used for the study.
Note: Those CFMA members that participated in the 2015 survey received a confidential individualized Company
Performance Report. This report presents a participant’s own ratios and data already computed in a manner
consistent with those appearing in the full report, which are displayed alongside the appropriate comparatives. As a
result, participating firms received invaluable information about their own business performance without having to
spend time and effort to make the calculations manually.
Ratio Calculation What It Means
PROFITABILITY RATIOS
Return on Assets Net Earnings Before Income Taxes ÷ Total Assets
Indicates the profit generated by the total assets employed. A higher ratio reflects a more effective employment of company assets. This ratio is generally stated in terms of percentages (i.e., 10% return on assets).
Return on Equity Net Earnings Before Income Taxes ÷ Total Net Worth
Indicates the profit generated by the net assets employed. This ratio reflects the stockholders' return on investment and is generally stated as a percentage. A very high ratio may indicate an undercapitalized situation or conversely, a very profitable company.
Times Interest Earned (Net Earnings + Income Taxes + Interest Expense) ÷ Interest Expense
Indicates the company's ability to pay interest expense from operations. A low ratio may indicate an over-leveraged situation and a need for more permanent equity.
LEVERAGE RATIOS
Debt to Equity Total Liabilities ÷ Total Net Worth
Indicates the relationship between creditors and owners. Generally, a ratio of three or lower is considered acceptable.
Revenue to Equity Revenue ÷ Total Net Worth Indicates the level of revenue being supported by each $1 of equity. Generally, a ratio of 15 or less is considered acceptable.
Asset Turnover Revenue ÷ Total Assets
Indicates the level of revenue being supported by each $1 of assets. By reviewing the trend of this ratio, one can determine the effectiveness of asset expansion.
AP P E N D I X
2015 CFMA F I N A N C I A L B E N C H M A R K E R R E P O R T (A N A L Y S I S O F 2014 R E S U L T S ) W W W . F I N A N C I A L B E N C H M A R K E R .C O M
29
Ratio Calculation What It Means
Fixed Asset Ratio Net Fixed Assets ÷ Total Net Worth
Indicates the level of stockholders' equity invested in net fixed assets. A higher ratio may indicate a lack of funds for current operations. Usually, a low ratio indicates a more favorable liquidity position; however, off balance sheet financing of equipment may offset this apparent positive indication.
Equity to G&A Expenses Total Net Worth ÷ G&A Expenses
Indicates the level of overhead in relation to net worth. Generally, a ratio of 1.0 or more is considered acceptable.
Underbillings to Equity (Unbilled Work + Cost in
Excess) ÷ Total Net Worth
Indicates the level of unbilled contract volume being financed by the stockholders. Usually stated as a
percentage, a ratio of 30% or less is considered acceptable.
Backlog to Equity Backlog ÷ Total Net Worth
Indicates the relationship of signed or committed work to total stockholders' equity. Generally, a ratio of 20 or less is considered acceptable. A higher ratio may indicate the need for additional permanent equity
EFFICIENCY RATIOS
Backlog to Working Capital Backlog ÷ Total Net Worth
Indicates the relationship of signed or committed work to total stockholders' equity. Generally, a ratio of 20 or less is considered acceptable. A higher ratio may indicate the need for additional permanent equity.
Months in Backlog Backlog ÷ (Revenue/12) Indicates the average number of months it will take to complete all signed or committed work.
Days in Accounts Receivable
[(Contract Accounts Receivable + Other Accounts Receivable - Allowance for Doubtful Accounts) x 360] ÷ Revenue
Indicates the number of days to collect accounts receivable. A lower ratio indicates a faster collection of receivables, thus more liquidity. Consideration should be given to the days in accounts payable ratio, because higher days in accounts receivable ratio may indicate a drain on cash flow.
Days in Inventory (Inventory x 360) ÷ Cost of
Sales
Indicates the number of days required to sell inventory. A high ratio may indicate overstocking of inventory.
Days in Accounts Payable [(Accounts Payable - Retainage) x 360] ÷ Total Cost
Indicates the average number of days it takes to liquidate trade payables. The ratio should be compared with credit terms of vendors. Retainage has been excluded.
Operating Cycle
Days in Cash + Days in Accounts Receivable + Days in Inventory - Days in Accounts Payable
Indicates the length of time it takes for the company to complete a normal operating cycle. A low ratio may indicate a need for more permanent working capital.
AP P E N D I X
2015 CFMA F I N A N C I A L B E N C H M A R K E R R E P O R T (A N A L Y S I S O F 2014 R E S U L T S ) W W W . F I N A N C I A L B E N C H M A R K E R .C O M
30
Ratio Calculation What It Means
LIQUIDITY RATIOS
Current Ratio Current Assets ÷ Current Liabilities
Indicates the extent to which current assets are available to satisfy current liabilities. Usually stated in terms of absolute values (i.e., 2.1 to 1.0, or simply 2.1). Generally, a minimum current ratio is 1.0, which indicates that current assets at least equal current liabilities.
Quick Ratio
(Cash and Cash Equivalents + Short-Term Investments + Receivables, Net) ÷ Current
Liabilities
Indicates the extent to which the more liquid assets are available to satisfy current liabilities. Usually stated in terms of absolute values, a quick ratio of
1.0 is generally considered a liquid position.
Days of Cash [(Cash and Cash Equivalents) x 360] ÷ Revenue
Indicates the number of days' revenue in cash. Generally, a ratio of seven days or more is considered adequate.
Working Capital Turnover Revenue ÷ Working Capital (Current Assets - Current Liabilities)
Indicates the amount of revenue being supported by each $1 of net working capital employed. A ratio exceeding 30 may indicate a need for increased working capital to support future revenue growth.
AP P E N D I X
2015 CFMA F I N A N C I A L B E N C H M A R K E R R E P O R T (A N A L Y S I S O F 2014 R E S U L T S ) W W W . F I N A N C I A L B E N C H M A R K E R .C O M
31
S U R V E Y Q U E S T I O N N A I R E
AP P E N D I X
2015 CFMA F I N A N C I A L B E N C H M A R K E R R E P O R T (A N A L Y S I S O F 2014 R E S U L T S ) W W W . F I N A N C I A L B E N C H M A R K E R .C O M
32
AP P E N D I X
2015 CFMA F I N A N C I A L B E N C H M A R K E R R E P O R T (A N A L Y S I S O F 2014 R E S U L T S ) W W W . F I N A N C I A L B E N C H M A R K E R .C O M
33
AP P E N D I X
2015 CFMA F I N A N C I A L B E N C H M A R K E R R E P O R T (A N A L Y S I S O F 2014 R E S U L T S ) W W W . F I N A N C I A L B E N C H M A R K E R .C O M
34
AP P E N D I X
2015 CFMA F I N A N C I A L B E N C H M A R K E R R E P O R T (A N A L Y S I S O F 2014 R E S U L T S ) W W W . F I N A N C I A L B E N C H M A R K E R .C O M
35
AP P E N D I X
2015 CFMA F I N A N C I A L B E N C H M A R K E R R E P O R T (A N A L Y S I S O F 2014 R E S U L T S ) W W W . F I N A N C I A L B E N C H M A R K E R .C O M
36
AP P E N D I X
2015 CFMA F I N A N C I A L B E N C H M A R K E R R E P O R T (A N A L Y S I S O F 2014 R E S U L T S ) W W W . F I N A N C I A L B E N C H M A R K E R .C O M
37
AP P E N D I X
2015 CFMA F I N A N C I A L B E N C H M A R K E R R E P O R T (A N A L Y S I S O F 2014 R E S U L T S ) W W W . F I N A N C I A L B E N C H M A R K E R .C O M
38
AP P E N D I X
2015 CFMA F I N A N C I A L B E N C H M A R K E R R E P O R T (A N A L Y S I S O F 2014 R E S U L T S ) W W W . F I N A N C I A L B E N C H M A R K E R .C O M
39
AP P E N D I X
2015 CFMA F I N A N C I A L B E N C H M A R K E R R E P O R T (A N A L Y S I S O F 2014 R E S U L T S ) W W W . F I N A N C I A L B E N C H M A R K E R .C O M
40
AP P E N D I X
2015 CFMA F I N A N C I A L B E N C H M A R K E R R E P O R T (A N A L Y S I S O F 2014 R E S U L T S ) W W W . F I N A N C I A L B E N C H M A R K E R .C O M
