A housing start is defined as when excavation begins for the foundation of the building. Home construction is important to the economy as it has wide spread effects on numerous related industries, to include: banking, mortgage industry, construction materials and land prices. The housing market is being affected by slightly higher mortgage rates, higher price…
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Salespeople are important to a business’s growth and success, but it is even more important for a business to manage, measure and compensate salespeople’s performance. First – the best way to compensate salespeople is on gross margin. Salespeople that are incented on gross margin sell the business’s products for the best price and at the…
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The following chart shows the growth in student loans between January 2006 to October 2018 in billions of dollars. In January 2006 there was 480.97 billion dollars and in October 2018 there was 1,569.35 billion dollars of student loans owned, securitized and outstanding. This is a 1,088.38 billion dollar or just over a trillion dollar…
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Listen to an executive that knows their business and they will tell you about the health of the business’s Balance Sheet, because they know that it is the Balance Sheet that will make or break their business (literally). Why is the Balance Sheet so important? The Balance Sheet shows executives, lenders and investors about the…
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The following chart shows the national average cost of a gallon of gasoline since August 1990 to present. An interesting point related to the cost of a gallon of gasoline is that the price increases during the summer driving season and during recessionary periods (recessions are denoted by the shaded gray bars on the chart…
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Executives often talk about the business’s revenue growth, but fail to focus on the profitability of the business. Over time there have been many businesses that have grown themselves right out of business by just focusing on revenue growth. Revenue growth is a wonderful thing for any business, but revenue growth at the sacrifice of…
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Thirty-year fixed rate mortgage interest rates are higher due to the simple fact that the loan is riskier for lending institutions. In addition, the borrower may be considered to be a higher credit risk, due to low credit ratings and/or low-down payments and incurring higher fees, such as, mortgage insurance premiums. Fifteen-year fixed rate mortgages…
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The economy is in flux, interest rates have increased over the past year and lenders are starting to be less flexible on their loan covenants. Business executives need to be completely aware of their business’s financial condition, especially how leveraged the balance sheet is and loan covenants that relate to the debt on the balance…
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The first minimum wage rate was established in the United States with The Fair Labor Standards Act of 1938 and the initial minimum wage was $0.25 cents per hour. This chart shows Federal minimum wage from 1968, which was $1.60 per hour, to January 1, 2019 where the Federal minimum wage is now $7.25 per…
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Executives need to understand that ratios are derived from the key components of a business’s financial statements and those ratios need to be viewed as a system that interrelates a business’s financial statements and operations. Ratio 1 – Gross Margin Percent: All businesses have different expenses that total up to cost of goods sold (COGS),…
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