Quick Consultant: Industry Profits and Sales Decline

What an exciting time to be in business! I must admit that I’ve been in this industry for more than 35 years and I can’t recall a single day when I actually dreaded going to work. I look forward to coming into the office every single day. Some days I’ve got a report to write, while other days I have to analyze some figures for a special article I am working on. It really doesn’t matter. There’s always something new and challenging on which to work.

This past weekend I found myself more energized than normal as I began examining some of the early data coming in from this spring’s special survey conducted by NAQP, its 2010 NAQP Financial Benchmarking Survey, formerly called the Operating Ratio Study.

To some readers, words such as “excited” or “extra energy” sound a bit over the top when it comes to analyzing financial ratios for an industry, but believe me when I say they are not. Having been a newspaper reporter before I got into the printing arena, there’s just something special about being among the first to uncover exactly what is happening in an industry, especially one with which you’ve you have been so closely involved with for so long.

So it comes as no surprise that I spent all day April 2-3 pulling together all the data submitted for this year’s biennial benchmarking survey so I could write about it in this column. Even though the deadline for the survey was March 22, we had to allow another few days for the surveys submitted by mail to work their way through the postal system and back to our offices.

As a practical matter, we simply cannot conduct any serious analyses whatsoever until all the data is available. Once we reach our assigned cut-off date, we then use a series of tests and examine virtually every cell for outliers and mathematical errors. With more than 300 printing firms submitting surveys this year, it meant that we had to deal with more than 40,000 data cells on our Excel spreadsheet. When we begin to do specific extractions or sorts it gets even worse, with the spreadsheet actually doubling in size to almost 80,000 cells as we use special sorting criteria and advanced filtering to explore some of the keys to success in our industry.

Customized Study to Participants
Fortunately, for as long as I can remember, I’ve always had help producing this study. My good friend and industry guru Larry Hunt has always been at my side helping me to produce this major industry project. While I use Excel to produce hundreds of special extractions, sorts, and comparisons, Larry has this truly unique talent for just being able to cut through the chaff and spot a major trend or an erroneous data entry in seconds, all without the benefit of Excel or a calculator. Larry, as he has done for years, will also author the Executive Summary that will accompany this year’s final study.

Every company that submitted a survey by the published deadline will receive a customized Financial Benchmarking Study before the end of May. The report will include a number of profit and loss, balance sheets, and key ratio sheets comparing various aspects of their performance against their peers in the industry. Accompanying each customized report will be a special Executive Summary written by Larry Hunt.

Hunt will also author a longer, more detailed Executive Summary that will appear in the complete, 86+ page 2010 Financial Benchmarking Study. Readers who did not participate in this year’s survey, can purchase the complete study directly from NAQP by going to its website at www.naqp.com. The new study is available to NAQP and NAPL members for only $155, and to non-members for $225.

From my perspective as both a consultant and industry analyst for more than 30 years, I consider this document to be in its own distinctive class. I have taken absolute novices in this industry and made them experts about its financial inner workings within one weekend, using nothing more than the Financial Benchmarking Study as a primary tool.