{"id":738,"date":"2017-12-20T08:00:00","date_gmt":"2017-12-20T13:00:00","guid":{"rendered":"https:\/\/www.sage.com\/en-us\/blog\/are-your-construction-companys-financials-best-in-class\/"},"modified":"2026-02-12T05:31:49","modified_gmt":"2026-02-12T10:31:49","slug":"are-your-construction-companys-financials-best-in-class","status":"publish","type":"post","link":"https:\/\/www.sage.com\/en-us\/blog\/are-your-construction-companys-financials-best-in-class\/","title":{"rendered":"Are your construction company\u2019s financials best in class?"},"content":{"rendered":"<header class=\"entry-header has-dark-background-color entry-header--has-illustration entry-header--has-illustration--generic\">\n\t<div class=\"container\">\n\t\t<div class=\"entry-header__row row align-center\">\n\t\t\t<div class=\"col col-lg-7 col-xlg-6 entry-header__content\">\n\t\t\t\t\t\t\t<div class=\"component component-single-header\">\n\t\t\t\t\t\t\t\t\t\t<div class=\"entry-header__misc text--subtitle text--uppercase text--small\">\n\t\t\t\t\t\t\t<a href=\"https:\/\/www.sage.com\/en-us\/blog\/category\/money-matters\/\" class=\"entry-header__link\">Money Matters<\/a>\t\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t<div class=\"entry-title-wrapper\">\n\t\t\t\t\t<h1 class=\"entry-title\">\n\t\t\t\t\t\tAre your construction company\u2019s financials best in class?\t\t\t\t\t<\/h1>\n\t\t\t\t<\/div>\n\n\t\t\t\t\t\t\t\t\t<p class=\"entry-header__description\">\n\t\t\t\t\t\t\t\t\t\t\t<\/p>\n\t\t\t\t\n\t\t\t\t\n\t\t\t\t\n\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t<\/div>\n\t<div class=\"single-post-details container\">\n\t\t<div class=\"col\">\n\t\t\t<span class=\"posted-on \"><time class=\"entry-date published\" datetime=\"2017-12-20T08:00:00-05:00\">December 20, 2017<\/time><\/span><span class=\"reading-time\"> min read<\/span>\n\t\t<button\n\t\t\ttype=\"button\"\n\t\t\tclass=\"social-share-button button button--icon button--secondary js-social-share-button\"\n\t\t\tdata-share-title=\"Are your construction company\u2019s financials best in class?\"\n\t\t\tdata-share-url=\"https:\/\/www.sage.com\/en-us\/blog\/are-your-construction-companys-financials-best-in-class\/\"\n\t\t\tdata-share-text=\"Please read this interesting article\"\n\t\t>\n\t\t\t<span class=\"social-share-button__share-label\">Share<\/span>\n\t\t\t<span class=\"social-share-button__copy-label\" hidden>Copy Link<\/span>\n\t\t\t<span class=\"social-share-button__copy-tooltip\" aria-hidden=\"true\" hidden>Copied<\/span>\n\t\t<\/button>\n\n\t\t\t\t<\/div>\n\t<\/div>\n<\/header>\n\n\n\n<div class=\"wp-block-post-author\">\n\t\t\t<div class=\"co-authors\">\n\t\t\t\n\t\t<div class=\"entry-author-wrapper\">\n\t\t\t<a class=\"entry-author\" href=\"https:\/\/www.sage.com\/en-us\/blog\/author\/debcarpenterbeck\/\">\n\t\t\t\t<img loading=\"lazy\" decoding=\"async\" width=\"40\" height=\"40\" src=\"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2017\/04\/CRE-Deb-Carpenter-Beck.jpg\" class=\"entry-author__image\" alt=\"CRE Deb Carpenter-Beck\" \/>\t\t\t\t<span class=\"entry-author__name\">Deb Carpenter-Beck<\/span>\n\t\t\t<\/a>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t<\/div>\n\t\t<\/div>\n\n\n\n<p>Gross profits, return on equity, liquidity, backlog ratio, revenue per employee. Is your company the best in the business when it comes to these and other key financial indicators? Or do you have some work to do?<\/p>\n\n\n\n<p>One way to improve your company performance is to compare your numbers to your peers.<\/p>\n\n\n\n<p>That\u2019s where the 2017 Construction Financial Benchmarker results come in handy. Just released by the Construction Financial Management Association (CFMA), the latest benchmarking results are packed with detailed analysis of key construction financial and operating data of nearly 1,500 companies from fiscal year 2016.<\/p>\n\n\n\n<p>\u201cFinancial results are basically a barometer of how well a firm is managed,\u201d says Jeff Longenecker, chairperson of CFMA\u2019s Benchmarker committee. \u201cIf a firm is well run, the financial results will reflect it. If there are areas of improvement, that\u2019s going to be obvious as well.\u201d<\/p>\n\n\n\n<p>Although there weren\u2019t necessarily any surprises in this year\u2019s results, Longenecker points out two particularly strong areas for today\u2019s contractors: level of profitability and leverage ratios. These and other Benchmarker metrics, he says, reflect a very healthy construction industry.<\/p>\n\n\n\n<p>Take, for example, the following year-over-year findings based on all company data:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Gross profits overall increased 1.7 percentage points<\/li>\n\n\n\n<li>Return on assets was up 1.1 percentage points<\/li>\n\n\n\n<li>Return on equity jumped 4.1 percentage points<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-relevant-comparisons\">Relevant comparisons<\/h2>\n\n\n\n<p>With the Benchmarker tool, you can also view the data by type of construction work performed, region, revenues, and overall financial performance, so you get a more relevant comparison to your own construction business.<\/p>\n\n\n\n<p>But the icing on the cake is the financial profile of best-in-class construction firms. Here\u2019s a sample: Best-in-class contractors generally report a return on asset of 26.3% and a return on equity of 59%. They also have less debt and a more stable fixed asset ratio. That\u2019s not all. The results also detail best-in-class for metrics such as profit per employee, gross profit margin, and net income before taxes.*<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-benchmarker-background\">Benchmarker background<\/h2>\n\n\n\n<p>The 2017 Construction Financial Benchmarker results are based on a confidential survey conducted in early 2017. In all, 1,496 companies submitted FY2016 data and provided detailed financial statements and other required information.<\/p>\n\n\n\n<p>The survey\u2019s results, presented in composite form, are accessible through the <a href=\"http:\/\/www.cfma.org\/resources\/content.cfm?ItemNumber=957\" target=\"_blank\" rel=\"noopener noreferrer\">CFMA Construction Financial Benchmarker<\/a>. By using this online tool, you can compare your company\u2019s financial performance directly with the survey\u2019s results.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-staying-on-top-of-your-game\">Staying on top of your game<\/h2>\n\n\n\n<p>Benchmarking is key to understanding what it takes to be successful in today\u2019s competitive construction industry. \u201cIf all you\u2019re doing is looking at your own financial results, you really have no idea if you are doing well or not,\u201d Longenecker stresses. Such tools as the Construction Financial Benchmarker will help you identify what you need to do to keep your business in top form.<\/p>\n\n\n\n<p>* The top performing contractors (top 25%), or best in class, is based on a composite ranking of 5 key performance metrics. Best in class status is determined among all Industrial &amp; Nonresidential contractors.<\/p>\n\n\n\n<p>&nbsp;<\/p>\n\n\n<div class=\"single-cta\">\n\t<div class=\"single-cta__positioner\">\n\t\t<div class=\"single-cta__wrapper has-dark-background-color\">\n\t\t\t<div class=\"single-cta__content\">\n\t\t\t\t\t\t\t\t<h2 class=\"single-cta__title h3\">Subscribe to our Sage Advice Newsletter<\/h2>\n\n\t\t\t\t\t\t\t\t\t<div class=\"single-cta__description\">\n\t\t\t\t\t\t<p>Get our latest business advice delivered directly to your inbox.<\/p>\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t<a\n\t\t\t\t\t\thref=\"#gate-ab515c6e-7e90-4c2f-a67e-113872516e8b\"\n\t\t\t\t\t\tclass=\"single-cta__button button button--primary\"\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t>Subscribe<\/a>\n\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<img decoding=\"async\" width=\"1440\" height=\"810\" src=\"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2022\/04\/GettyImages-1073797282-1440x810.jpg\" class=\"single-cta__image\" alt=\"Working from home with tea in hand\" loading=\"lazy\" srcset=\"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2022\/04\/GettyImages-1073797282-1440x810.jpg 1440w\" sizes=\"auto, (min-width: 48em) 33vw, 100vw\" \/>\t\t\t<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Gross profits, return on equity, liquidity, backlog ratio, revenue per employee. Is your company the best in the business when it comes to these and other key financial indicators? Or do you have some work to do? One way to improve your company performance is to compare your numbers to your peers. That\u2019s where the [&hellip;]<\/p>\n","protected":false},"author":78,"featured_media":1294,"menu_order":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_sage_video":false,"post_featured_image_hide":false,"footnotes":""},"categories":[43],"tags":[4,192,179],"business_type":[],"lilypad":[],"context":[],"industry":[50],"persona":[],"imagine_tag":[246],"coauthors":[522],"class_list":["post-738","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-money-matters","tag-business-intelligence","tag-construction","tag-construction-reporting","industry-construction-and-real-estate"],"sage_meta":{"region":"en-us","author_name":"Deb Carpenter-Beck","featured_image":"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2017\/05\/UK_Kingpin_SageLive_101215-35.jpg","imagine_tags":{"246":"Construction"}},"distributor_meta":false,"distributor_terms":false,"distributor_media":false,"distributor_original_site_name":"Sage Advice US","distributor_original_site_url":"https:\/\/www.sage.com\/en-us\/blog","push-errors":false,"_links":{"self":[{"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/posts\/738","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/users\/78"}],"replies":[{"embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/comments?post=738"}],"version-history":[{"count":1,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/posts\/738\/revisions"}],"predecessor-version":[{"id":35358,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/posts\/738\/revisions\/35358"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/media\/1294"}],"wp:attachment":[{"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/media?parent=738"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/categories?post=738"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/tags?post=738"},{"taxonomy":"business_type","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/business_type?post=738"},{"taxonomy":"lilypad","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/lilypad?post=738"},{"taxonomy":"context","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/context?post=738"},{"taxonomy":"industry","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/industry?post=738"},{"taxonomy":"persona","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/persona?post=738"},{"taxonomy":"imagine_tag","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/imagine_tag?post=738"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/coauthors?post=738"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}