Lumber & Building Materials Dealers
NAICS 444190: This industry comprises establishments (except those known as home centers, paint and wallpaper stores, and hardware stores)
primarily engaged in retailing specialized lines of new building materials, such as lumber, fencing, glass, doors, plumbing fixtures and supplies,
electrical supplies, prefabricated buildings and kits, and kitchen and bath cabinets and countertops to be installed.
 



click each Key Ratio box below to view Benchmarks charts

Margins and Profit

Inventory Productivity

Financial Strength

©Copyright, The Retail Owners Institute®. Based on data from Risk Management Association Annual Statement Studies, 2016/2017.  www.rmahq.org

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Profits in Store -2



Find Your Ratios

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The ROI's Quick Reference "Cheat Sheet" 

The Formulas • Where to Find the Numbers • What Each Ratio Tells You

 

 
 

How to Calculate
Your Key Financial Ratios

Where to Find the Information

What the Ratios Tell

Current Ratio =
Current Assets divided by Current Liabilities

Your balance sheet

Tests for solvency or ability to meet current debt obligations. Measures how well you can cover current liabilities with liquid assets.

 (Higher is better; 2.0 is average.)

Quick Ratio =
Cash + Accounts Receivable divided by Current Liabilities

Your balance sheet

Tests the degree of solvency most strictly, using only the most liquid current assets. 

(Higher is better; 0.5 is average.)

Debt-to-Worth Ratio =
Total Liabilities divided by Total Owner's Equity

Your balance sheet

Compares what the company "owes" creditors to what it "owns." Measures the financial strength of the business.

(Lower is better; 1.0 is average.)

Inventory Turnover =
COGS (Cost of Goods Sold) divided by Average Inventory @Cost

COGS are recorded on your income statement; Inventory is found on your balance sheet.

Measures how often, at present rate of sales, your entire inventory is completely sold and replaced during a given year. Measures inventory "velocity." 

(Higher is better; average depends on industry.)

Gross Margin % =
Gross Profit $ divided by Net Sales

Your income statement (P&L)

Indicates percentage of sales dollars remaining after costs related to purchasing merchandise are recognized.

Profit Before Taxes % =
Profit Before Taxes divided by Net Sales

Your income statement (P&L)

Indicates percentage of sales dollars remaining after all costs (except taxes) are recognized.

(Higher is better; average depends on industry.)

Return on Assets (ROA) =
Profit Before Taxes divided by Net Assets

Your income statement and balance sheet

Indicates pretax return on assets; measures productivity of assets. 

(Higher is better; average depends on industry.)

Gross Margin Return on Inventory (GMROI) =
Gross Margin $ divided by Average Inventory @Cost

Gross Margin - your income statement
Inventory @ Cost - your balance sheet.

Measures the gross margin returned for each dollar invested in inventory. (Higher is better; average depends on industry.)

   
     

©Copyright, The Retail Owners Institute® • www.RetailOwner.com • All rights reserved.

 

Have questions about how to read these ratios, or what they really mean? 

Get answers at The ROI's Retail Benchmarks Resource Center. Free to everyone to use.

  1. See the how-to article: Go Figure! How to Calculate Your Key Ratios - in 12 Seconds Each!
  2. Watch and listen to the recorded webinar: The Retail OWNER'S DASHBOARD

Very quickly, you can see how and why to monitor the true "vital signs" of your business. 

 

"How and when can these benchmark numbers be used?"

  1. For perspective. Calculate these ratios for your own business, and then see how you compare to your retail industry segment.

  2. Use these benchmarks when you are setting your own target ratios for the next year.

  3. You should know that when you are seeking a bank loan for your business, the bankers will look at these industry benchmarks as they assess your store's performance. 

  4. The credit departments of your vendors and landlords will examine your ratios to assess your credit worthiness.

  5. Use The ROI's Key RATIOS Calculator on this page to quickly calculate your own ratios. 

The segments featured at The ROI reflect the definitions and designations of the North American Industrial Classification System (NAICS).

The top of each Retail Segment Page on The ROI site includes the NAICS code and the NAICS definition for that industry segment.

The ROI has selected six key ratios (from the abundance of ratios available) that are particularly important for retailers to regularly monitor and manage. See The ROI's Benchmarks Resource Center to learn more about these key ratios for retailers.

The ROI's exclusive Retail Benchmark Trend Charts show the median value reported by Risk Management Association's Annual Statement Studies for each of these key ratios each year.

Remember, there also is a Top Quartile – and Bottom Quartile – of results for every segment. See your local library for those details.


FYI


  National Lumber & Building Materials Dealers Association

NLBMDA - National Lumber & Building Materials Dealers Association
 
 
 


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