Benchmarking tool aids in improved distributor profits

With challenging financial times continuing to affect most businesses, the National Truck Equipment Association believes financial benchmarks are especially important.

The 2004 NTEA Distributor PROFIT Report, available to NTEA Distributor PROFIT Survey participants, provides individualized consulting advice for distributors. Designed around specific guidelines for improving financial results, the report not only presents a profile for the typical firm in the industry, it outlines the results obtained by the most successful ones - helping to identify a path of improvement for every firm's bottom line.

Each participant in the Profit Survey will not only receive a copy of the summary results, but also two important tools to help in improving profitability: a printed report comparing the firm to specific benchmarks and a computer planning program, both of which help management delve into the ways their financial performance can be strengthened over time.

Every participating firm receives an individual company report comparing their firm's results to similar firms (e.g., those with the same sales size, in the same geographic region, or with the same product mix). The report, called the Profit Improvement Profile (PIP), also indicates how your company compares to the industry's most profitable firms.

The PIP provides data for more than 100 different measures, ranging from sales per employee to inventory turnover to gross margin as a percent of sales. The report also includes all key financial ratios, and a complete percentage income statement and balance sheet.

Each of the key measures is accompanied by a thorough discussion explaining why it is important to the business. In short, the PIP provides a detailed analysis of where the firm stands financially. In addition, it indicates how the firm should go about improving performance, laying out a complete game plan indicating what the firm should do and the profit results that can be expected.

The Profit Toolkit can help turn benchmarks into action. For 2004, the Profit Toolkit will be a Web-based program available only to participating firms. In addition, the specific tools provided will change from year-to-year.

For 2004, the topic is Developing a Financial Plan, presented in a user-friendly, Microsoft Excel format. After downloading the program from the Web, it is only necessary to enter a few select numbers and the firm can then develop a plan quickly, easily and accurately.

Surveys are due to PPG June 15. If you have questions about the NTEA Distributor PROFIT Survey, contact PPG at (303) 444-6212, or [email protected]

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