This post was contributed by Stuart W. Margolis, CPA, MT and Suzette Margolis from Margolis Partners, LLC. Together with Printing Industries of America and membership participation, Margolis Partners brings you the annual Ratios Survey. Visit www.printing.org/ratios to learn more or participate in the 2015 Ratios Survey.  For most of us, ratios are not something we think of every day, at least not until springtime and the onset of baseball season. If you want to compare two Major League home-run hitters, you are likely to compare their batting averages.  If one is hitting .389 and the other’s average is .236, you immediately know which is doing better, even if you don’t know precisely how a batting average is calculated.   When applied to business, think of ratios as “batting averages for business”. In baseball or in business most ratios measure some form of productivity. They generally give an indication of how one result varied in relation to another. Ratios are a tool to make it easier to do an “apples to apples” comparison.  In fact, the classic batting average statistic is: The number of hits made by the batter, divided by the number of times the player was at bat. (For baseball enthusiasts, those are “official at-bats,” which is total appearances at the plate minus walks, sacrifice plays, and any time the player was hit by a pitch.)  The batting average is thought of as a measure of a baseball player’s productivity; it is the ratio of hits made to the total opportunities to make a hit.  HITSAT BATS Other baseball ratios include Earned Run Averages, Average Pitching Strikes to Ball Ratio, and more.  For some reason, they all make sense to us. Avid fans can visually see each pitch, strike out, and hit so they have a general idea of how players and team are performing.  In business, it is more difficult to “see” productivity, especially productivity as compared to the competition. After all, we don’t line up and engage a competitor in an open field for the whole world to see. It makes monitoring ratios all the more critical. There are many ratios you can use to monitor productivity verses the competition.  They all measure how good a job your company is doing using its assets, generating profits from each dollar of sales, turning over inventory, or whatever aspect of your company’s operation you are evaluating. For your business, ratios are nothing more than simple comparisons between specific pieces of information pulled from your company’s balance sheet and income statement. You can use ratio analysis to examine the current performance of your company in comparison to past periods of time, from the prior quarter to years ago. Frequently, this can...

This post was contributed by Stuart W. Margolis, CPA, MT and Suzette Margolis from Margolis Partners, LLC. Together with Printing Industries of America and membership participation, Margolis Partners brings you the annual Ratios Survey. Visit www.printing.org/ratios to learn more or participate in the 2015 Ratios Survey.  For most of us, ratios are not something we think of every day, at least not until springtime and the onset of baseball season. If you want to compare two Major League home-run hitters, you are likely to compare their batting averages.  If one is hitting .389 and the other’s average is .236, you immediately know which is doing better, even if you don’t know precisely how a batting average is calculated.   When applied to business, think of ratios as “batting averages for business”. In baseball or in business most ratios measure some form of productivity. They generally give an indication of how one result varied in relation to another. Ratios are a tool to make it easier to do an “apples to apples” comparison.  In fact, the classic batting average statistic is: The number of hits made by the batter, divided by the number of times the player was at bat. (For baseball enthusiasts, those are “official at-bats,” which is total appearances at the plate minus walks, sacrifice plays, and any time the player was hit by a pitch.)  The batting average is thought of as a measure of a baseball player’s productivity; it is the ratio of hits made to the total opportunities to make a hit.  HITSAT BATS Other baseball ratios include Earned Run Averages, Average Pitching Strikes to Ball Ratio, and more.  For some reason, they all make sense to us. Avid fans can visually see each pitch, strike out, and hit so they have a general idea of how players and team are performing.  In business, it is more difficult to “see” productivity, especially productivity as compared to the competition. After all, we don’t line up and engage a competitor in an open field for the whole world to see. It makes monitoring ratios all the more critical. There are many ratios you can use to monitor productivity verses the competition.  They all measure how good a job your company is doing using its assets, generating profits from each dollar of sales, turning over inventory, or whatever aspect of your company’s operation you are evaluating. For your business, ratios are nothing more than simple comparisons between specific pieces of information pulled from your company’s balance sheet and income statement. You can use ratio analysis to examine the current performance of your company in comparison to past periods of time, from the prior quarter to years ago. Frequently, this can...

When you boil it down, a financial ratio is a simple mathematical formula that compares two or more sets of numbers. However, as our market still struggles to find solid ground post-Recession, this formula is critical to maintain control of your firm’s operations. Financial benchmarking is the number-one way to take the reins and control operational costs. Few people understand financial ratios—and how printers can apply them—better than Stuart Margolis, CPA, MT, of Margolis Partners, LLC. If you’ve participated in the Ratios, you probably recognize his name. He’s a long-time partner of Printing Industries of America who helps industry members increase profits with Ratios financial benchmarking. Why is financial benchmarking so vital to success? If you’re a business owner or manager, you know you need to keep your costs in line with sales. The Ratios let you 1) track operation costs, 2) compare them to those of industry profit leaders, and 3) pinpoint areas for improvement. As an active consultant for Printing Industries of America, Stu has seen the good, the bad, and the ugly when it comes to how some companies control their operations. We sat down with Stu to find out how top firms are taking back control of their operations and developing a strategic plan for the future using Ratios. Through Margolis Partners you’ve published many guidelines for effective management strategies using Printing Industries of America Ratios. What are the top three best practices you’ve seen your clients implement to benchmark their company against industry profit leaders? SM: Well my number one best practice IS always to benchmark your company, so if you do that, you’re already ahead of the game! But the top three best strategies I urge all my clients to employ are: 1) Structure your financial information in the standard format for the printing industry. Although it may seem obvious to some, it’s an important, often overlooked step that allows you to organize your statements and make direct comparisons to other financial reports. Since the Ratios survey is formatted to this structure, participants can do this easily allowing a side-by-side comparison of your numbers to those of industry profit leaders. 2) Set up a “Profit Plan” for the next year that describes how you will operate in the future. With consistent benchmarking, you can begin to compare your current performance to previous years. This strategy reveals specific areas for improvement and challenges you to perform as a profit leader. 3) Benchmark, plan, repeat. Although that’s a rather simplified statement, essentially the companies that continuously repeat this process of benchmarking and then setting up the following year’s Profit Plan are the ones that I see succeed most often. These are the firms that build...

When you boil it down, a financial ratio is a simple mathematical formula that compares two or more sets of numbers. However, as our market still struggles to find solid ground post-Recession, this formula is critical to maintain control of your firm’s operations. Financial benchmarking is the number-one way to take the reins and control operational costs. Few people understand financial ratios—and how printers can apply them—better than Stuart Margolis, CPA, MT, of Margolis Partners, LLC. If you’ve participated in the Ratios, you probably recognize his name. He’s a long-time partner of Printing Industries of America who helps industry members increase profits with Ratios financial benchmarking. Why is financial benchmarking so vital to success? If you’re a business owner or manager, you know you need to keep your costs in line with sales. The Ratios let you 1) track operation costs, 2) compare them to those of industry profit leaders, and 3) pinpoint areas for improvement. As an active consultant for Printing Industries of America, Stu has seen the good, the bad, and the ugly when it comes to how some companies control their operations. We sat down with Stu to find out how top firms are taking back control of their operations and developing a strategic plan for the future using Ratios. Through Margolis Partners you’ve published many guidelines for effective management strategies using Printing Industries of America Ratios. What are the top three best practices you’ve seen your clients implement to benchmark their company against industry profit leaders? SM: Well my number one best practice IS always to benchmark your company, so if you do that, you’re already ahead of the game! But the top three best strategies I urge all my clients to employ are: 1) Structure your financial information in the standard format for the printing industry. Although it may seem obvious to some, it’s an important, often overlooked step that allows you to organize your statements and make direct comparisons to other financial reports. Since the Ratios survey is formatted to this structure, participants can do this easily allowing a side-by-side comparison of your numbers to those of industry profit leaders. 2) Set up a “Profit Plan” for the next year that describes how you will operate in the future. With consistent benchmarking, you can begin to compare your current performance to previous years. This strategy reveals specific areas for improvement and challenges you to perform as a profit leader. 3) Benchmark, plan, repeat. Although that’s a rather simplified statement, essentially the companies that continuously repeat this process of benchmarking and then setting up the following year’s Profit Plan are the ones that I see succeed most often. These are the firms that build...

Each year, you analyze your company’s key performance indicators (KPIs). You use the Ratios to compare your numbers against industry profit leaders—the top 25% in terms of profit as a percent of sales. Then you note discrepancies and come to educated conclusions, like “Our paper costs are out of line with industry averages we need to review our contracts with our vendors” or maybe “Our waste and spoilage figures are higher than average” or “Our sales per factory employee are too low to support our current staffing; we need to increase sales to current customers, develop new market opportunities, or reduce our staffing levels.” But what does it really take to be more profitable? Our members wanted to know, so our Center for Economics and Market Research team designed a revealing new survey. It uncovers how profit leaders get successful and what strategies they’re using that you’re not. The Strategic Management Survey looks deeper at the management processes profit leaders use. It goes beyond asking printers to share their numbers to really discover what makes a profit leader a “profit leader.” If you want to know, just take the survey to find out! We asked Ed Gleeson, Director, Center for Economics and Market Research, about this new survey and how it will help printers increase their profits. You just released the new Strategic Management Survey. Can you tell us more about and how it helps printers become more profitable? When we consult with members about how they can benchmark their financial ratios to the profit leaders, the feedback we often get is that they already know where they have to improve. What they are more interested in is “how” profit leaders earn more per every dollar in sales. Using the Ratios for financial benchmarking is a great starting point for developing a strategy to become a profit leader and can help you determine some of your strengths and weaknesses. The Strategic Management Survey is designed to help take you to the next level by determining which practices help lead to increased profitability. For example, according to the 2013 Ratios, on average a profit leader with $3 million in sales spends 32.6% of sales on factory payroll, while the average printer allocates 37.0% of sales to factory payroll. In this example the profit-leading firms save $132,000 a year in factory payroll costs. How do the profit leaders produce the same volume of work at a significantly lower labor rate? This survey is designed to determine how and why profit leaders are more efficient and productive. It also determines what strategic management practices correlate most with profitability. To put it in perspective, the Ratios provide the “where” do we need to...

Each year, you analyze your company’s key performance indicators (KPIs). You use the Ratios to compare your numbers against industry profit leaders—the top 25% in terms of profit as a percent of sales. Then you note discrepancies and come to educated conclusions, like “Our paper costs are out of line with industry averages we need to review our contracts with our vendors” or maybe “Our waste and spoilage figures are higher than average” or “Our sales per factory employee are too low to support our current staffing; we need to increase sales to current customers, develop new market opportunities, or reduce our staffing levels.” But what does it really take to be more profitable? Our members wanted to know, so our Center for Economics and Market Research team designed a revealing new survey. It uncovers how profit leaders get successful and what strategies they’re using that you’re not. The Strategic Management Survey looks deeper at the management processes profit leaders use. It goes beyond asking printers to share their numbers to really discover what makes a profit leader a “profit leader.” If you want to know, just take the survey to find out! We asked Ed Gleeson, Director, Center for Economics and Market Research, about this new survey and how it will help printers increase their profits. You just released the new Strategic Management Survey. Can you tell us more about and how it helps printers become more profitable? When we consult with members about how they can benchmark their financial ratios to the profit leaders, the feedback we often get is that they already know where they have to improve. What they are more interested in is “how” profit leaders earn more per every dollar in sales. Using the Ratios for financial benchmarking is a great starting point for developing a strategy to become a profit leader and can help you determine some of your strengths and weaknesses. The Strategic Management Survey is designed to help take you to the next level by determining which practices help lead to increased profitability. For example, according to the 2013 Ratios, on average a profit leader with $3 million in sales spends 32.6% of sales on factory payroll, while the average printer allocates 37.0% of sales to factory payroll. In this example the profit-leading firms save $132,000 a year in factory payroll costs. How do the profit leaders produce the same volume of work at a significantly lower labor rate? This survey is designed to determine how and why profit leaders are more efficient and productive. It also determines what strategic management practices correlate most with profitability. To put it in perspective, the Ratios provide the “where” do we need to...