1 ContentsIncome-Expense statement - dollar-basedIncome-Expense statement - percentage-basedAnnual Cash RatiosAverage Monthly Cash, Income and ExpenFinancial Ratios - Cash Flow-SolvencyFinancial Ratios - ProfitabilityFinancial Ratios - EfficiencyAbout the DataFirms Analyzed201334,607201439,798201537,59420 1632,925201730,7352018q235,345 Net Profit (%)Sole Proprietor Micro firm Profit-Lossrelease date: December 2018 Plumbing, Heating, and Air-Conditioning ContractorsSector: Average Revenue, Income & Expense ($)201320142015201620172018q2 Revenue497,530449,609382,168324,843373,5 69317,534 Inventory (% Revenue)3,7143,0402,5921,6942,2901,947 Cost of Sales167,164154,305133,700111,542127,809 108,902 COS-Labor Portion34,53730,70228,36120,85722,14319, 086 Gross Profit330,366295,305248,467213,300245,76 0208,631 Salary-Wages19,77618,43918,30212,42411,8 0710,177 Contract Labor-Commissions32,94929,78728,04225,92 233,67129,022 Rent6,7345,8734,8584,3394,8924,216 Advertising2,5982,5661,7621,7851,9951,72 0 Benefits-Pension9817911,087351352303 Insurance (non-health)
2 9,6438,4406,8256,2417,2336,234 Taxes Paid4,9124,5093,4663,1653,9113,371 Sales, General, Admin & Misc97,73288,60380,09065,59071,69361,795 EBITDA155,041136,296104,03493,484110,206 91,792 Interest paid2,3471,6731,3911,4171,4591,181 Home Office Expense3,0862,2811,6751,7411,7501,508 Amortization & Depreciation13,15511,2368,2847,8369,9138 ,214 Total Expenses193,913174,198155,782130,810148, 675127,742 Net Profit136,452121,10692,68582,49097,08580 ,889 Total Direct Labor & NP223,714200,034167,391141,693164,706139 ,174 Annual Average Revenue, Income & Expense (%) (% Revenue) of (non-health) , General, Admin & Office & Direct Labor & (% Revenue): The stockpile of unsold products. Unlike corporate reports which show inventory as a percent oftotal assets, the sole proprietorship financial format displays Inventory as a percent of of Sales includes materials and labor involved in the direct delivery of a product or service.
3 Other costs are includedin the cost of sales to the extent that they are involved in bringing goods to their location and condition ready to be overheads such as development costs may be attributable to the cost of goods sold. The costs ofservices provided will consist primarily of personnel directly engaged in providing the service, including supervisorypersonnel and attributable Portion: This reporting format details labor from the materials and delivery portion of the total Cost of Profit represents direct operating expenses plus net profit. In addition to the labor portion of Cost of Sales, wagecosts are reflected in the Officers Compensation and Wages-Salary line items. The Contract Labor-Commissions lineitem is reserved for non-employee labor, sales and related costs. In many cases, SG&A (Sales, General andAdministrative) costs also include some overhead, administrative and supervisory Taxes line item includes the employer portion of payroll tax on wages taken during the year as well as other paid-intax items.
4 Sole Proprietorships do not accrue federal business income taxes; Instead, Net Profit is assessed as owner swages. As a result, the Net Profit line item represents what is commonly referred to as Pre-tax Net Profit or Net ProfitBefore Tax. Although it is a controversial measure, the EBITDA line item (Earnings before interest, taxes, depreciation andamortization) adds back Interest Paid, Depreciation-Amortization and Home Office expense to reduce the effect of paper expenses and accounting decisions on the bottom line of the Profit and loss Statement. Since some firmsutilized EBITDA is to add back non-cash and flexible expenses which may be altered through credits and accountingprocedures (such as income tax), paid-in income taxes from the Taxes Paid line item are not added back in the covers the rental cost of any business property, including land, buildings and (non-health) costs include business liability and property insurance, but exclude employee health insurance,which is covered under the Benefits-Pension line includes advertising, promotion and publicity for the reporting business, but not on behalf of includes, but is not limited to, employee health care and retirement addition to varying proportions of overhead, administrative and supervisory wages, some generally more minorexpenses, including repairs and written-off debt, are aggregated under SG&A (Sales, General and Administrative).
5 The Total Direct Labor & NP line is developed to indicate overall labor costs, aggregating them as a percentage indicatorfor one-person sole proprietorships as well as larger operations. Total Direct Labor & NP sums the labor portion of Costof Sales, Salary-Wages, Contract Labor-Commissions and Net Profit line Time Series: Financial reports all analyze calendar years as displayed. Our winter release reports display anadditional, overlapped year running from the end of the second quarter of the prior year to the end of the second quarterof the release Sole Proprietor /Startup Profit & loss series mirrors the more streamlined financial reports of many startup firms andsole proprietorships. Startups which are not structured as Sole Proprietorships, and SPs desiring a corporate-stylebalance sheet analysis, can utilize the small business and lower sales class versions of the Industrial Financial sales and other dollar-based data in this report reflect averages for sales of the industry segment, not totalindustry-wide averages.
6 As a result, sales levels may vary from year to year, depending on the mix of firms that a relistedas startups (single site firms with one year or less of operation) or sole proprietorships. Because most startups are alsosole proprietorships, the sole Proprietor reporting format is used for our startup financial series as well. Dollar values maynot sum due to Cash Ratios ($)201320142015201620172018q2 Revenue497,530449,609382,168324,843373,5 69317,534 Cost of Sales167,164154,305133,700111,542127,809 108,902 Gross Profit330,366295,305248,467213,300245,76 0208,631 All Direct Expenses342,489313,313278,133231,359263, 363225,741 Net Cash152,694134,623102,64492,067108,74790 ,611 Net Cash & Labor239,955213,550177,350151,269176,368 148,897 Annual Cash Ratios (%)201320142015201620172018q2 Net Cash/ Cash/ Cost of Cash/ Gross Cash/ All Direct Cash/ Net Cash & Direct Expenses includes Cost of Sales plus Total Expenses from the P1 Income & Expense table, less largely non-cash Amortization, Depreciation and Home Office expenses.
7 Net Cash adds back these non-cash expenses. Thisgenerally offers a more comprehensive picture of owner compensation, which will also vary with the actual proportion ofowner Monthly Cash, Income and Expen tables on the following page are calculated on a straight-line sales sales patterns alter monthly cash flow (but not annual totals).Average Monthly Cash, Income and Expenses: 2015 JanFebMarchAprlMayJuneJulyAugSeptOctNovD ecRetained Cash011,21922,43733,65644,87456,09367,31 178,53089,749100,967112,186123,404 Income37,46737,46737,46737,46737,46737,4 6737,46737,46737,46737,46737,46737,467 Available Cash37,46748,68659,90571,12382,34293,560 104,779115,997127,216138,435149,653160,8 72 Cost of Sales12,85912,85912,85912,85912,85912,85 912,85912,85912,85912,85912,85912,859 Gross Profit24,60924,60924,60924,60924,60924,6 0924,60924,60924,60924,60924,60924,609 All Direct ,24926,24926,24926,24926,24926,24926,249 26,24926,24926,24926,24926,249 Net Cash11,21922,43733,65644,87456,09367,311 78,53089,749100,967112,186123,404134,623 Net Cash & Labor17,79635,59253,38871,18388,979106,7 75124,571142,367160,163177,959195,755213 ,550 Average Monthly Cash, Income and Expenses.
8 2016 JanFebMarchAprlMayJuneJulyAugSeptOctNovD ecRetained Cash08,55417,10725,66134,21542,76851,322 59,87668,42976,98385,53794,090 Income31,84731,84731,84731,84731,84731,8 4731,84731,84731,84731,84731,84731,847 Available Cash31,84740,40148,95557,50866,06274,616 83,16991,723100,277108,830117,384125,938 Cost of Sales11,14211,14211,14211,14211,14211,14 211,14211,14211,14211,14211,14211,142 Gross Profit20,70620,70620,70620,70620,70620,7 0620,70620,70620,70620,70620,70620,706 All Direct ,29423,29423,29423,29423,29423,29423,294 23,29423,29423,29423,29423,294 Net Cash8,55417,10725,66134,21542,76851,3225 9,87668,42976,98385,53794,090102,644 Net Cash & Labor14,77929,55844,33859,11773,89688,67 5103,454118,233133,013147,792162,571177, 350 Average Monthly Cash, Income and Expenses: 2017 JanFebMarchAprlMayJuneJulyAugSeptOctNovD ecRetained Cash07,67215,34423,01730,68938,36146,033 53,70561,37869,05076,72284,394 Income27,07027,07027,07027,07027,07027,0 7027,07027,07027,07027,07027,07027,070 Available Cash27,07034,74242,41550,08757,75965,431 73,10380,77688,44896,120103,792111,465 Cost of Sales9,2959,2959,2959,2959,2959,2959,295 9,2959,2959,2959,2959,295 Gross Profit17,77517,77517,77517,77517,77517,7 7517,77517,77517,77517,77517,77517,775 All Direct ,39819,39819,39819,39819,39819,39819,398 19,39819,39819,39819,39819,398 Net Cash7,67215,34423,01730,68938,36146,0335 3,70561,37869,05076,72284,39492,067 Net Cash & Labor12,60625,21237,81750,42363,02975,63 588,240100,846113,452126,058138,663151,2 69 Average Monthly Cash, Income and Expenses.
9 2018 JanFebMarchAprlMayJuneJulyAugSeptOctNovD ecRetained Cash09,06218,12527,18736,24945,31154,374 63,43672,49881,56090,62399,685 Income31,13131,13131,13131,13131,13131,1 3131,13131,13131,13131,13131,13131,131 Available Cash31,13140,19349,25558,31867,38076,442 85,50494,567103,629112,691121,753130,816 Cost of Sales10,65110,65110,65110,65110,65110,65 110,65110,65110,65110,65110,65110,651 Gross Profit20,48020,48020,48020,48020,48020,4 8020,48020,48020,48020,48020,48020,480 All Direct ,06822,06822,06822,06822,06822,06822,068 22,06822,06822,06822,06822,068 Net Cash9,06218,12527,18736,24945,31154,3746 3,43672,49881,56090,62399,685108,747 Net Cash & Labor14,69729,39544,09258,78973,48788,18 4102,881117,579132,276146,974161,671176, 368 Net Cash: RevenueNet Cash Turnoverfinancial ratios: Cash Flow - Solvency201320142015201620172018q2 Net Cash/ Revenue % Cash Turnover (x) Cash: Revenue: (Retained Cash plus Net Profit) divided by Revenue.
10 Adds back non-out of pocket items ( ,depreciation, amortization, home office) which show as expenses but largely do not reduce liquid Cash Turnover: Revenue divided by Cash. Cash totals taken from the Cash Flow table less out of pocket too far from the benchmark may indicate overly conservative or aggressive liquidity Profit: RevenueEBITDA: RevenueReturn on Revenuefinancial ratios: Profitability201320142015201620172018q2 Gross Profit: : on Profit: Revenue: Gross Profit: divided by Annual Revenue. This is the profit ratio before direct expenses. This ratiocan indicate the "play" in other expenses which could be adjusted to increase the Net Profit : Revenue: Earnings Before Interest, income taxes due, Depreciation and Amortization divided by : Revenue is a relatively controversial (and often criticized) metric designed to eliminate the effect of finance andaccounting decisions when comparing companies and industry benchmarks.