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2012 FINANCIAL RATIO STUDY

2012 PRINTING INDUSTRIES OF AMERICA FINANCIAL RATIO STUDY


PRINTING INDUSTRIES ASSOCIATION, INC. OF SOUTHERN CALIFORNIA ALL PRINTERS

An Annual Financial Survey Conducted By: Printing Industries of America, Inc. 200 Deer Run Road Sewickley, PA 15143 Tel: (800) 910-4283 www.printing.org

Edited and Prepared by: MargolisBecker, LLC Certified Public Accountants 161 Washington Street Conshohocken, PA 19428 Tel: (610) 667-4310 www.MargolisBecker.com

The introduction and published statistical material may not be distributed in whole or in part without express permission.
2012 by Printing Industries of America, Inc.

THE PRINTING INDUSTRIES OF AMERICA FINANCIAL RATIO STUDIES STANDARDS OF ANALYSIS FOR THE PRINTING INDUSTRY The Printing Industries of America Financial Ratio Studies permit management, using these standards of comparative financial analysis, to find their company's position in the graphic arts industry. Using the data from the ratios, management can evaluate their company's policies to improve profitability. The Financial Ratio Studies consist of 16 unique studies, each in its own booklet. They are:

Management Guide to the Ratios All Printers by Sales Volume and Geographic Area All Printers by Product Specialty Sheetfed Printers by Sales Volume and Geographic Area Web Offset Printers - Heatset Web Offset Printers - Coldset/Non-Heatset Combination Offset - Sheetfed/Web Book Manufacturers

Printers With Sales Over $18,000,000 Binders Printers With Sales Under $3,000,000 Quick Printers Forms and Document Printers Label Printers Digital Printers Commercial and Advertising Printers

Each booklet allows management to compare their company's financial operations with the financial operations of other companies, including the industry's Profit Leaders. These comparisons can be with companies with similar manufacturing specialties, sales volume, printing processes and geographical areas. A company's strengths and weaknesses can be pinpointed using the information within the Financial Ratio Studies. They also help answer questions such as:

Are my expenses too high in relation to sales? Am I producing enough value added sales? Can we meet our debts as they mature? How can we increase our profits?

Is there too little or too much inventory? Are our customers' receivables collected promptly? Should we increase our selling prices?

To maximize the value of the Financial Ratio Studies you must apply them effectively. The aim of this customized Area Study is to help management make the fullest use of the Financial Ratio Studies in analyzing and interpreting their relevant financial information. HOW THE PRINTING INDUSTRIES OF AMERICA FINANCIAL RATIO STUDIES ARE COMPUTED AVERAGING The Printing Industries of America Financial Ratio Studies use a method of computation that avoids distortion or bias, of the data, by companies with very large or very small dollar amounts. This distortion known as "self-weighting", is common when dealing with statistics with extreme highs and lows. With the use of proper safeguards self-weighting can be eliminated. Our method is a valid statistical approach that calculates a ratio or percentage between the sales of a company and each of its cost categories. The percentages are added and an average is computed. This average gives us an excellent basis for comparison.

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HOW THE PRINTING INDUSTRIES OF AMERICA FINANCIAL RATIO STUDIES ARE COMPUTED AVERAGING (Continued) The following example shows how this method eliminates the problem of possible distortion by very large firms. % OF SALES FIRM A B C SALES $ 200,000 500,000 8,000,000 FACTORY PAYROLL $ 60,000 100,000 975,000 FIRM'S RATIO FACTORY PAYROLL 30.0 % 20.0 12.2 62.2 % MEDIAN VALUES The Financial Ratio Study also uses median values in reporting certain significant facts. A median value is defined as the middle number in a series of numbers. Therefore at least half the reporting firms are as small as or smaller than the median, and at least half are as large as or larger than the median. Using the median eliminates the skewing in the values reported when the distribution is asymmetric. We believe that the use of the median, for certain significant facts, provides the reporting of the appropriate values for the responding companies. WHO ARE ALL FIRMS? In the Financial Ratio Studies, the term "All Firms" has two distinct meanings. It stands for all the firms participating in the Financial Ratio Studies, and at other times it refers to all participating firms within in a particular category. When the term "All Firms" is used, the context in which it is placed will make the intent clear. PROFIT LEADERS CRITERION Since 1992 the PIA/GATF Ratio Studies defines "Profit Leaders" as those firms whose profits are above the upper quartile point based on profits as a measure of value added. The median divides the distribution into two equal parts. The quartiles divide it into four equal parts. By selecting the upper quartile, we allowed the data for the top 25% of the participating firms to be averaged together, to give all printers purposeful results to strive towards. Divided by 3 = 20.7 % RATIO FACTORY PAYROLL

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HOW THE PRINTING INDUSTRIES OF AMERICA FINANCIAL RATIO STUDIES ARE COMPUTED

PROFIT LEADERS CRITERION (Continued) The "PROFIT LEADERS" are the average of the common size percentages of firms above the upper quartile point.

Lower Quartile Point

Median

Upper Quartile Point

This method to calculate "Profit Leaders" allows for more meaningful "Profit Leaders" ratios and related significant facts. The formula is able to compensate for recessions and expansions. If the economics of an aspect of the industry warrants a lower or higher profit standard, this upper quartile technique produces the desired results. After all, there are significant differences between a hand bindery and a web press printing plant, and we have a method for determining "Profit Leaders" that is flexible to the financial differences presented. We have a "Profit Leaders" ratio which, provided there are at least twenty firms in the category, would then designate five firms to be the "Profit Leaders." SURVEY RESULTS - SALES BREAKDOWN FROM SERVICES

Sales Breakdown From Services


Percentage of Sales Revenue Services Rendered Printing and Prepress Binding and Finishing Mailing Services Fulfillment Services Database Management Services Other Non-Print Ancillary Services Total Services 2012 72.55 % 13.90 6.12 3.32 0.70 3.41 100.00 % 2011 71.18 % 15.83 5.45 3.25 0.75 3.54 100.00 % 2010 72.98 % 15.69 4.21 3.13 0.44 3.55 100.00 % 2009 72.27 % 16.16 4.83 3.20 0.78 2.76 100.00 % 2008 75.03 % 14.49 4.34 2.57 0.75 2.82 100.00 %

The proportion of printers sales revenues derived from printing and prepress decreased to 71.18 percent of sales, the lowest level reported over the five-year period and continuing the general pattern of decline. In contrast, the proportion of sales from binding/finishing increased from 15.69 percent to 15.83 percent. In total, ancillary services revenue increased slightly from 11.33 percent of sales to 12.99 percent, continuing its general pattern of increases.
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PRINTING INDUSTRIES OF AMERICA AREA FINANCIAL RATIO STUDY

Each section of this analysis calculates your area's results. The sections are: Report on Operations - Value Added = 100% Report on Operations - Sales = 100% The Balance Sheet Significant Facts Each section of the analysis calculates your groups results so the reader can make easy comparisons. A discussion of each section follows below.
SECTION 1 - REPORT ON OPERATIONS - VALUE ADDED = 100% If sales are up but profits are down, something is wrong. Even when sales are level and profits are lower, management has a problem. The problem area, in all likelihood, is in your Inside Sales, or Value Added. Typically, managers are unfamiliar with this critical concept and do not realize this may be the root of their problem. Value Added Defined Value Added is the term for the sale of products manufactured in a company's plant. To calculate Value Added you subtract the cost of materials and outside purchases from the sales price. In other words, Value Added is the value added to purchased materials and outside services by your manufacturing efforts. SALES LESS: MATERIALS PAPER OTHER CHARGEABLE MATERIALS OUTSIDE SERVICES VALUE ADDED Value Added Maximizes Profit Profit is attained from sales of a company's own manufacture. This is a basic maxim in the printing industry. Or, to put it simply: you make your profit from the work done inside your plant, not outside. When managers ignore this key principle, they lose a valuable tool for earning superior profits. There may be other reasons, of course, for poor operating performance, but neglect of the Value Added principle is the major and most frequent reason for low profits. $ 22 6 7 35 $ 65 $ 100

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AREA FINANCIAL RATIO STUDY SECTION 2 - REPORT ON OPERATIONS - SALES = 100% Reports on Operations start with sales, the amount you charge for your product. You should price your company's products intelligently. Printing is a made to order product. Every job is different and uses different facilities in your plant for varying periods of time. You must know your costs. To price your finished job sensibly, you must also have a good system for gathering costs and formulating a sales price that is competitive and profitable. SECTION 3 - THE BALANCE SHEET A balance sheet is a statement of a company's financial position at a point in time. It lists assets, liabilities and owners' equity. The term, "balance sheet," describes a financial report where the two sides must balance or be equal. The balance sheet equation may take one of two forms: Assets = Liabilities + Owners' Equity OR Assets - Liabilities = Owners' Equity A company's assets are everything the company owns. Its liabilities are everything it owes. Owners' equity is what is left after liabilities are subtracted from assets. It represents the financial interest of the proprietor, partner(s) or shareholder(s) - whoever owns the company. A good manager should understand the relationship of a balance sheet's components to the company operations. An assessment of the company's balance sheet can reveal many aspects of its operational capabilities. As with other financial data, an intelligent analysis can provide a unique management tool. Keep in mind that particular ratios and relationships may diverge according to the processes a company uses or what products it produces. For example, it is likely that a web-offset printer would have a greater investment in plant equipment and, correspondingly, more liabilities (debt) or equity (owners' financial interest) to support those assets than a bindery. SECTION 4 - SIGNIFICANT FACTS The significant facts are composed of extensive ratios in the following areas: Profitability Ratios Liquidity and Activity Ratios Leverage and Funding Ratios Employee Profiles These ratios are important statistics for management. They are as meaningful as the financial statements themselves. Often, they offer the lowest common denominator, which can be easily managed to produce higher profits. The next section gives you some definitions and the use of certain significant facts.

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DEFINITIONS AND PURPOSES OF PERTINENT RATIOS 1. RETURN ON INVESTMENT Return on investment (ROI) refers to the capital employed to produce income. The calculation is a very simple computation and is done two ways. ROI - GROSS ASSETS = ROI - NET ASSETS = PROFIT BEFORE INTEREST AND OTHER INCOME NET ASSETS PLUS ACCUMULATED DEPRECIATION PROFIT BEFORE INTEREST AND OTHER INCOME NET ASSETS

Return on investment incorporates the two major factors in measuring profits - income and investment. For this reason, it is considered the most comprehensive measure of profitability. ROI is gaining wider acceptance as a tool in measuring profitability in the graphic arts industry. This is due to the capitalintensive nature of the industry. Most firms have large dollar amounts invested in fixed assets and their profit performance should be measured against the investment. 2. VALUE ADDED PER FACTORY EMPLOYEE This ratio is important and is computed as follows: VALUE ADDED PER FACTORY EMPLOYEE = SALES LESS MATERIALS AND OUTSIDE PURCHASES NUMBER OF FACTORY EMPLOYEES

Often, managers do not know whether they have too many factory employees or not enough. This ratio gives you a chance to measure what your factory employees are producing and how they compare to the industry. You must know this number and plan to improve it; the result will be increased profitability. 3. CURRENT RATIO The current ratio measures a company's ability to meet short-term obligations, thus playing a key role in determining whether there is adequate working capital. It is computed by dividing current assets by current liabilities. CURRENT RATIO = CURRENT ASSETS CURRENT LIABILITIES

Some people say that doing business with other people's money, "trading on equity," is good business. This is rarely true. If the current ratio is lowered by too much debt, assets such as inventory and cash will not be available when needed.

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DEFINITIONS AND PURPOSES OF PERTINENT RATIOS 3. CURRENT RATIO (Continued) In addition, when working with too much of other people's money, a demand for cash repayment of the loan can prevent a printer from investing current assets profitably in his business. It can prevent him from buying and discounting raw materials and outside services, and can affect his credit with banks that, in turn, can hinder the purchase of fixed assets. In short, working with other people's money makes the lender a partner who is mainly concerned with his money and interest, not your business. 4. COLLECTION PERIOD The collection period of accounts receivable shows the time that is required to collect cash from customers after sales are made. The sooner receivables are collected, the sooner the money can be put to use -- to invest in more assets, to pay off liabilities, or to earn interest. As the collection period increases or decreases, it affects a company's cash, receivables, inventory, payables, and interest; in other words, it affects the company's entire operation. The collection period is computed by dividing the average accounts receivable by the annual sales figure, and then multiplying the result by 365. COLLECTION PERIOD OF RECEIVABLES = AVERAGE ACCOUNTS RECEIVABLE X 365 ANNUAL SALES

This ratio reflects a company's credit and collection policies. Most firms have about 51 days worth of their annual sales in accounts receivable. For example, if sales were $2,500,000, a typical firm would have $349,300 outstanding. Shortening the collection period reduces that portion of assets that are tied up in receivables and related interest costs. All companies, including Profit Leaders, should make every possible effort to shorten collection periods. Some ways to do this are: 1. BILL CUSTOMERS WHEN THE JOB IS COMPLETED, not at the end of the month as many printers do. 2. Offer effective incentives for customers to pay on time. 3. Seek good, credit-worthy customers. 4. If good customers are consistently slow paying, consider the cost of maintaining large accounts receivable balances when pricing their work.

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DEFINITIONS AND PURPOSES OF PERTINENT RATIOS 5. INVENTORY TURNOVER Inventory is the sum of work-in-process, paper and other chargeable materials and supplies. Finished goods inventory may be small or non-existent because most of a printer's sales are specialized, produced "to order" jobs. The equation used for computing inventory turnover is as follows: TOTAL INVENTORY TURNOVER = COST OF PRODUCT PRODUCED AVERAGE INVENTORY

The cost of materials, labor and factory overhead, is taken from the income statement and is divided by the average inventory. In those instances where customers supply paper, inventories will fluctuate. This could possibly affect a printer's comparison of his inventory percentages to those in the Ratio Study. Parenthetically, when customers supply paper, a printer should still make a realistic handling and overhead charge for paper to cover his labor and warehousing costs, plus a profit mark-up. A low inventory turnover points to the possibility of a larger than necessary investment in inventory. A higher turnover implies better management and control. 6. DEBT TO EQUITY Leverage and funding ratios reflect a company's total debt - short-term and long-term. These ratios are important to a manager, especially if his company is expanding and needs debt financing. He will want his company's leverage ratios to compare favorably with those of the graphic arts industry. This is a factor that lending institutions will look at closely because it measures the relationship between shareholders' funds and borrowed funds. Management should consider the two debt-to-equity ratios analyzed below: DEBT TO EQUITY = TOTAL LIABILITIES EQUITY LONG-TERM LIABILITIES EQUITY

LONG-TERM LIABILITIES TO EQUITY =

Profit leaders have dramatically lower ratios of both debt to equity and long-term debt to equity. This indicates that they are more financially secure and in a better position to fund further acquisitions and expansion.

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Printing Industries Association, Inc. of Southern California

REPORT ON OPERATIONS
VALUE ADDED = 100% ALL FIRMS

Factory Payroll 35.70%

Factory Expenses 27.09%

Admin. Expenses 19.34%

Selling Expenses 16.92%

Other Income* 0.20%

Profit 1.15%

-5.00%

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

40.00%

*Other income net of interest expense

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Printing Industries Association, Inc. of Southern California


REPORT ON OPERATIONS - VALUE ADDED = 100%
All Printers All Firms

SALES OR VALUE OF PRODUCT PRODUCED LESS: PAPER, OTHER CHARGEABLE MATERIALS AND OUTSIDE SERVICES

VALUE ADDED BY MANUFACTURE

100.00 %

FACTORY PAYROLL FACTORY EXPENSES

35.70 27.09 62.79

TOTAL FACTORY COST OF PRODUCT

GROSS PROFIT

37.21

ADMINISTRATIVE AND SELLING EXPENSES


Administrative expenses Selling expenses 19.34 16.92

TOTAL ADMINISTRATIVE AND SELLING EXPENSES

36.26

INCOME BEFORE INTEREST EXPENSE


Interest expense

0.95 1.66

OPERATING INCOME (LOSS)


Other income

(0.71) 1.86

INCOME BEFORE INCOME TAXES

1.15 %

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Printing Industries Association, Inc. of Southern California


SUPPORTING SCHEDULES - VALUE ADDED = 100%
All Printers All Firms

FACTORY PAYROLL
Salaries - executive Direct wages General factory salaries and wages Packing, shipping and delivery wages Payroll taxes Employee benefits 2.40 % 22.44 3.41 2.14 2.34 2.97 35.70 %

TOTAL FACTORY PAYROLL FACTORY EXPENSES


Fixed Expenses Depreciation - real estate Depreciation - other Taxes - real estate Taxes - other Insurance Building rent Utilities - heat, light etc. Equipment rental Total Fixed Expenses Other Expenses Factory supplies and expense Packing, shipping and delivery expense Repairs and maintenance Other factory expense Total Other Expenses

0.01 % 5.11 0.20 0.52 1.22 6.55 2.12 0.85 16.58 2.58 3.96 2.78 1.19 10.51 27.09 % 5.79 % 5.46 0.78 0.97 0.36 0.48 0.73 1.13 0.15 0.72 2.77 19.34 % 1.93 % 9.84 0.89 0.84 0.79 0.83 0.66 1.14 16.92 %

TOTAL FACTORY EXPENSES ADMINISTRATIVE EXPENSES


Salaries - executive Salaries - office Payroll taxes Employee benefits Bad debts Data processing expense Office supplies and expenses Professional fees Taxes - business Telephone Other administrative expenses

TOTAL ADMINISTRATIVE EXPENSES SELLING EXPENSES


Salaries - executive Salaries and commissions - salesmen Salaries - sales office clerical Payroll taxes Employee benefits Advertising Travel and entertainment Other selling expenses

TOTAL SELLING EXPENSES

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Printing Industries Association, Inc. of Southern California

REPORT ON OPERATIONS
SALES = 100% ALL FIRMS

Materials 37.70%

Factory Payroll 21.80%

Factory Expenses 17.23%

Admin. Expenses 12.18%

Selling Expenses 10.12%

Other Income* 0.04%

Profit 1.01%

-5.00%

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

40.00%

*Other income net of interest expense

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Printing Industries Association, Inc. of Southern California


REPORT ON OPERATIONS - SALES = 100%
All Printers All Firms

SALES OR VALUE OF PRODUCT PRODUCED FACTORY COST OF PRODUCT


MATERIALS Paper Other chargeable materials Outside services TOTAL MATERIALS FACTORY PAYROLL FACTORY EXPENSES

100.00 %

19.62 4.91 13.17 37.70 21.80 17.23 76.73 23.27

TOTAL FACTORY COST OF PRODUCT GROSS PROFIT ADMINISTRATIVE AND SELLING EXPENSES
Administrative expenses Selling expenses

12.18 10.12 22.30 0.97 1.01 (0.04) 1.05 1.01 %

TOTAL ADMINISTRATIVE AND SELLING EXPENSES INCOME BEFORE INTEREST EXPENSE


Interest expense

OPERATING INCOME (LOSS)


Other income

INCOME BEFORE INCOME TAXES SUPPORTING SCHEDULES - SALES = 100% OTHER CHARGEABLE MATERIALS
Ink Click charges Plates Other chargeable materials

1.84 % 0.61 1.00 1.46 4.91 %

TOTAL OTHER CHARGEABLE MATERIALS OUTSIDE SERVICES


Prepress Printing Binding Other outside services

0.17 % 6.47 3.55 2.98 13.17 % - 13 -

TOTAL OUTSIDE SERVICES

Printing Industries Association, Inc. of Southern California


SUPPORTING SCHEDULES - SALES = 100%
All Printers All Firms

FACTORY PAYROLL
Salaries - executive Direct wages General factory salaries and wages Packing, shipping and delivery wages Payroll taxes Employee benefits 1.41 % 13.61 2.31 1.23 1.44 1.80 21.80 %

TOTAL FACTORY PAYROLL FACTORY EXPENSES


Fixed Expenses Depreciation - real estate Depreciation - other Taxes - real estate Taxes - other Insurance Building rent Utilities - heat, light etc. Equipment rental Total Fixed Expenses Other Expenses Factory supplies and expense Packing, shipping and delivery expense Repairs and maintenance Other factory expense Total Other Expenses

0.00 % 3.31 0.12 0.33 0.75 4.02 1.30 0.52 10.35 1.56 2.71 1.82 0.79 6.88 17.23 % 3.55 % 3.50 0.50 0.60 0.24 0.27 0.47 0.70 0.09 0.45 1.81 12.18 % 1.10 % 5.88 0.57 0.51 0.45 0.47 0.44 0.70 10.12 %

TOTAL FACTORY EXPENSES ADMINISTRATIVE EXPENSES


Salaries - executive Salaries - office Payroll taxes Employee benefits Bad debts Data processing expense Office supplies and expenses Professional fees Taxes - business Telephone Other administrative expenses

TOTAL ADMINISTRATIVE EXPENSES SELLING EXPENSES


Salaries - executive Salaries and commissions - salesmen Salaries - sales office clerical Payroll taxes Employee benefits Advertising Travel and entertainment Other selling expenses

TOTAL SELLING EXPENSES

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Printing Industries Association, Inc. of Southern California

BALANCE SHEET
TOTAL ASSETS = 100% ALL FIRMS

ASSETS

LIABILITIES AND EQUITY

Current Assets 57.53%

Equity 22.74%

Current Liabilities 45.27%

Fixed Assets 38.86%

Other Assets 3.61%

Long-Term Liabilities 31.99%

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Printing Industries Association, Inc. of Southern California


BALANCE SHEET
All Printers All Firms

ASSETS
CURRENT ASSETS
Cash Receivables Inventories Marketable securities Other current assets 10.99 % 31.41 9.52 0.00 5.61 57.53

TOTAL CURRENT ASSETS FIXED ASSETS


Real estate Less: Accumulated depreciation

0.38 0.22 0.16 157.07 122.19 34.88 18.97 15.15 3.82 38.86 3.61 100.00 %

Machinery and equipment Less: Accumulated depreciation

Other fixed assets Less: Accumulated depreciation

NET FIXED ASSETS OTHER ASSETS

TOTAL ASSETS LIABILITIES AND EQUITY


CURRENT LIABILITIES
Notes payable Accounts payable Other current liabilities

10.44 % 19.30 15.53 45.27 31.99 77.26 22.74 100.00 % - 16 -

TOTAL CURRENT LIABILITIES LONG-TERM LIABILITIES TOTAL LIABILITIES SHAREHOLDERS' & PROPRIETORS' EQUITY

TOTAL LIABILITIES AND EQUITY

Printing Industries Association, Inc. of Southern California

FACTORY EMPLOYEE DATA


SALES AND VALUE ADDED PER FACTORY EMPLOYEE ALL FIRMS

$250,000 $200,000 $150,000 $100,000 $50,000 $0 SALES $249,991 VALUE ADDED $159,610

EMPLOYEE WAGE DATA


AVERAGE PAYROLL PER EMPLOYEE ALL FIRMS
$100,000 $90,000 $80,000 $70,000 $60,000 $50,000 $40,000 $30,000 $20,000 $10,000 $0 Factory $50,090 Administrative $82,682 Sales $91,515 All $63,361

Wages include taxes and benefits (Executives are included)

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Printing Industries Association, Inc. of Southern California


SIGNIFICANT FACTS - PROFITABILITY RATIOS
All Printers All Firms

PROFITABILITY RATIOS
MEASURE OF PROFITS
Income before income taxes A. As a percent of sales B. Per employee Income before interest expense (Return on Investment) A. As a percent of gross assets B. As a percent of net assets Earnings before income taxes, interest expense, factory depreciation and amortization (EBITFDA) A. As a percent of sales B. As a percent of value added $ 1.01 % 933

0.71 % 1.43

5.33 % 7.93

SALES FACTORS
Sales per $1 of gross assets Sales per $1 of net assets Sales per $1 of current assets Sales per $1 of net fixed assets Sales per employee Sales per factory employee $ 1.29 3.10 5.68 12.40 171,261 249,991

GROSS PROFIT ANALYSIS


Gross profit as a percent of sales Gross profit per factory employee Components of cost of product produced as a percent of sales A. Materials B. Factory payroll C. Factory expenses $ 23.27 % 60,936

37.70 % 21.80 17.23

VALUE ADDED ANALYSIS


Value added per employee Value added per factory employee Analysis of operations to value added A. Factory payroll B. Factory expenses C. Administrative expenses D. Selling expenses E. Interest expense Gross profit as a percent of value added Income before income taxes as a percent of value added $ 106,187 159,610 35.70 % 27.09 19.34 16.92 1.66 37.21 1.15

Numerical Average / Median Value - 18 -

Printing Industries Association, Inc. of Southern California


SIGNIFICANT FACTS - FINANCIAL RATIOS
All Printers All Firms

Financial Ratios
FINANCIAL LEVERAGE
Income before interest expense as a multiple of interest expense Times interest earned 0.96

LIQUIDITY AND ACTIVITY RATIOS


Current ratio Quick ratio Cash asset ratio Days cash for operating expenses excluding depreciation Accounts receivable turnover Number of days sales in accounts receivable (Collection Period) Inventory turnover A. Total inventory turnover B. Number of days - total inventory C. Paper inventory turnover D. Number of days - paper inventory Current asset turnover Operating cycle - in days Distribution of current assets A. Cash B. Accounts receivable C. Inventory D. Other current assets 1.27 0.94 0.24 8 8.24 44 19.22 19 42.76 9 5.68 63 16.80 % 55.03 16.92 11.25

LEVERAGE AND FUNDING RATIOS


Debt to equity Long-term debt to equity Funding of total assets A. Current liabilities B. Long-term debt C. Total debt D. Shareholders' equity Long-term debt to long-term debt and equity Fixed assets to long-term debt Fixed assets to shareholders' equity Fixed assets to long-term debt and shareholders' equity Investment turnover Sales to assets A. Gross assets B. Net assets C. Net fixed assets Sales to total debt 3.40 1.41 45.27 % 31.99 77.26 22.74 0.58 1.21 1.71 0.71

1.29 3.10 12.40 4.34

Numerical Average / Median Value

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Printing Industries Association, Inc. of Southern California


SIGNIFICANT FACTS - EMPLOYEE PROFILE
All Printers All Firms

EMPLOYEE PROFILE
INVESTMENT PER EMPLOYEE
Per employee for all employees A. Shareholders' equity B. Net assets employed Per employee for all factory employees A. Net assets employed B. Machinery and equipment employed $ 26,083 65,166 99,801 129,865

EMPLOYEES
As a percent of total employees Factory employees Administrative employees Sales employees 68.97 % 17.15 13.88

PAYROLL - INCLUDING TAXES & BENEFITS INCLUDING EXECUTIVES


Total payroll as a percent of sales Total payroll as a percent of value added Factory payroll as a percent of gross plant investment Payroll per employee - all employees Payroll per factory employee Payroll per administrative employee Payroll per sales employee 38.46 % 62.99 36.56 63,361 50,090 82,682 91,515

PAYROLL - EXCLUDING TAXES & BENEFITS EXECUTIVE PAYROLL


Payroll per executive - all executives Payroll per factory executive Payroll per administrative executive Payroll per sales executive $ 111,135 68,172 119,083 120,000

NON-EXECUTIVE PAYROLL
Payroll per non-executive employee - all employees Payroll per factory non-executive employee Payroll per administrative non-executive employee Payroll per sales non-executive employee 52,638 41,152 48,996 77,117

DIRECT AND SUPPORT LABOR RATIOS INCLUDING TAXES & BENEFITS


Direct labor as a % of value added Support labor as a % of value added Support labor efficiency factor 26.36 % 36.63 1.39

Numerical Average / Median Value - 20 -

Printing Industries Association, Inc. of Southern California


Absolute Data
Average Firm Reporting** Sales or Total Total Value of Income Assets Production (Loss)

Number of Participating Firms

Total - All Firms Total - Profit Leaders*

16 4

310,565

722,571

( 10,228 )

*** Data Not Being Presented

* "PROFIT LEADERS" are those firms who achieved profits in the first quartile (25%), of their respective category, based on value added. ** Unlike the ratios in this book, the figures are arithmetic averages. *** To assure confidentiality, data is not being presented due to the limited number of respondents in the category.

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