Money Talk: Take the Steps towards Greater Profitability for Your Company

Printers and others in the graphic arts business demonstrate that the Printing Industries of America Ratios studies play a significant role in the growth and success of their firms.

By reviewing key information from the company’s operations, then measuring themselves against the most successful companies, Ratios participants found efficiency and productivity improvements that helped contain expenses, produce more billable work, and identify opportunities for revenue growth.

Boelte-Hall, LLC, a printer in Roeland Park, KS, has used the Ratios for years. The company participates in a printing industry peer group that benchmarks performance of its members verses the industry profit leaders each year. Boelte-Hall is proud to say that benchmarking helps the group. “Through careful monitoring and managerial direction, many of us have joined the elite top 25 percent of industry profit generators. Turning a profits is not easy, but tools like the Ratios absolutely help.” Steve Hall, Boelte-Hall.

According to Donald A. Pizzenti, CFO, Cohber Press Inc., “We use the Ratios study to compare ourselves against other printers of our size regionally and nationally. Although all printers are unique in their own way, it is amazing how the [data] in the study is extremely accurate and can be used to help make decisions.”

As you can see, these companies find tangible benefits from participating in the Ratios—whether you are a long-time user or new a practitioner. Printers can regularly compare themselves to companies from across the US and Canada, of a variety of sizes, which produce a variety of graphic arts products: sheetfed print, web print, digital print, labels, newspapers, magazines, and books as well as general commercial print. There is even a series for binders. What’s best, participation in the ratio program is free.

Hundreds of companies have found that the Ratios helped their company ro become more efficient, more productive, more confident, more focused, better managed, and more profitable. All of which adds up to a company that is, on average, eight times more profitable than the competition!

To most effectively use the PIA Ratio Studies as a benchmark, here are some tips.

Use industry standard formatting for your financial statements to facilitate comparison to and interpretation of the Ratio data. An example of this standardized reporting format is as follows:

List your Value Added (VA) calculation on the face of your internal financial statements. VA = Sales – Material Costs. It reveals the actual value you added to the paper, the ink, the finishing, etc. By excluding pass through expenses such as expensive paper or outside bindery costs, you will be able to focus on variations of in-plant manageable expenses such as factory expenses, factory payroll, and administrative/selling expenses that need to be tightly managed on every job. For Example:

Calculate most of your Ratios as a % of VA, not as a % of Sales. Using VA as the basis of ratio calculation has historically provided a better benchmark for monitoring costs and profit. For example, most industry studies have shown that