Wholesale / Distribution Compensation & Benefits Benchmarking Report 2012 Wholesale / Distribution Benchmarking Report | Page 14

2012

Another way to gaug a compan success is to calcula gross ma
w
ge
ny’s
s
ate
argin per full-time equiva
alent
employee This number is calculated by divid
e.
ding gross p
profit by the n
number of fu
ull-time
equivalen employee The comp
nt
es.
panies with Over 50 Em
O
mployees see to be hiring back
em
employee as a faste rate than their Under 50 Employe counterpa who hav had a
es
er
ee
arts
ve
substantial increase suggesting that their hir
t
ring hasn’t p icked up like the larger c
e
companies h
have
yet and are doing mo with less
a
ore
s.
GROSS MAR
RGIN
per full-tim equivalent employee
me
e
,877
$200,

$200
0,000
$150
0,000
$100
0,000

$125,703
$
$113,284
$91,110

$1
145,441
7,352 $127,6
$137
623
$129,124

2
2005
2
2007
2
2009
2
2011

$50
0,000
$0
Unde 50 employe
er
ees Over 50 employees

Another measurement of importa
ance to wholesale/distrib
butors is retu on comm
urn
mitted capita
al.
This perc
centage can be calculate by dividin EBITDA b working c
ed
ng
by
capital. EBIT
TDA is earnin
ngs
before interest, taxes depreciation, and amo
s,
ortization an d working C
Capital is (Inv
ventory +
Receivab
bles + Plant Net) – Paya
ables.
This grap illustrates that distribu
ph
s
utors had be pulling d
een
down invento levels in a down
ory
economy and rebuild
y
ding inventor and holdin onto cash As workin capital improves, it lea
ry
ng
h.
ng
ads
to a lowe ROCC. 20 is a good ratio to be at and deno
er
0%
d
otes efficiency and profit
tability. A go
ood
benchma is to have your ROCC be double the rate at which you a borrowing
ark
e
e
are
g.
RETU
URN ON CO
OMMITTED CAPITAL (
(ROCC)
40.67%
38.37 %
36.03%

45%
40%
35%

32.63%
%
30.00%

31.25
5%

30%
25%

22
2.71%

20%

13.93%

15%

2005
5
2007
7
2009
9
2011

10%
5%
0%
Under 50 emplo
U
oyees Over 5 employees
50

o.,
SI
© Barnes Dennig & Co Ltd. and US Insurance

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age