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  #1  
Old 03-19-2013, 02:51 PM
RobRillo RobRillo is offline
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Financial Numbers - Question

Hey Everyone:

I'm a geeky accountant trying to help out a close personal friend in the business out with some of his questions and I'm trying to gauge an accurate assessment of the overall health of his financials.

I was wondering if anyone had debt with a bank, and if so, what debt-covenants (generally minimum ratios you're required to keep or level of Accounts Receivable, etc) you might have.

Also, and I know this might be personal and I could be over stepping, what your Assets, Current & LT Liabilities, and/or any Debt/Current Ratios might be.

I would be really appreciative of any help you'd be willing to give and maybe I could help you with something in exchange.

-RR
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Old 03-19-2013, 03:28 PM
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GreenUtah GreenUtah is offline
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That's more likely a question for the bankers you have a relationship with as each has their own guidelines and comfort levels with service businesses. What others experience is with bankers who are not available to you is pretty much irrelevant.

The same will hold true for any one else's P&L statements or assets and liabilities as each contractor will take their own unique approach and decisions about equipment, storage, etc.

You're not going to encounter a formula that even remotely applies to a majority in this business beyond be as efficient as you know how and charge more than it costs you to provide the service (and even that doesn't apply for a large number of LCOs).
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Old 03-19-2013, 03:36 PM
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grandview (2006) grandview (2006) is offline
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I think some guys are lucky to keep 10 bucks in their account and hope money comes in before the next payment is due.
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Old 03-19-2013, 03:43 PM
RobRillo RobRillo is offline
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I agree with these points.

I guess what I'm looking to do is to get an industry benchmark of sorts to compare to. I believe this is doable as I have seen it and created it in many industries.

I admit my experience with LCOs is none and am leaning towards just using similar sized manufacturing companies as their is a lack of information.
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Old 03-19-2013, 04:08 PM
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Thanksman Thanksman is offline
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Quote:
Originally Posted by grandview (2006) View Post
I think some guys are lucky to keep 10 bucks in their account and hope money comes in before the next payment is due.
Agreed
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Old 03-20-2013, 12:49 PM
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snomaha snomaha is online now
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Location: midwest
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Quote:
Originally Posted by RobRillo View Post
Hey Everyone:

I'm a geeky accountant trying to help out a close personal friend in the business out with some of his questions and I'm trying to gauge an accurate assessment of the overall health of his financials.

I was wondering if anyone had debt with a bank, and if so, what debt-covenants (generally minimum ratios you're required to keep or level of Accounts Receivable, etc) you might have.

Also, and I know this might be personal and I could be over stepping, what your Assets, Current & LT Liabilities, and/or any Debt/Current Ratios might be.

I would be really appreciative of any help you'd be willing to give and maybe I could help you with something in exchange.

-RR

Equipment/vehicles - 5 year term note secured with the assets purchased.

LOC - borrowing base is 75% of A/R 60 days or under.

Equipment LOC - purchase equipment on this and it terms out once a year.

Current ratio - 1.95
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  #7  
Old 03-20-2013, 11:44 PM
dllawson dllawson is offline
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Lawn & Landscape Magazine has a benchmark calculator on their website. http://www.lawnandlandscape.com/Benchmark/
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  #8  
Old 03-21-2013, 03:00 PM
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Kelly's Landscaping Kelly's Landscaping is online now
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I have 2 trucks loans we bought them in 2011 and 2012 total purchase price 125k we currently have around 37k on one and 47k on the other. But those are secured loans.

Non secured loans vendor credit like our line of credit for lesco/john deere but its not much only has 3700 for the line and we can't ever seem to get that below 2000 for more than a few weeks.

There's the equipment dealers but they expect to be paid in about a month same with our mulch and topsoil guy.

The AMX card has a 20k line but is do in full each month so you do not charge what you won't be able to pay or bad things happen.

Assets don't have the exact numbers but 200-250k is a safe bet hope that helps.
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Old 03-21-2013, 03:54 PM
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RLS24 RLS24 is online now
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Pay for as much with cash as possible and on things that I do have to take out a loan for, make it top priority to pay them off as soon as possible. I like to won everything I have so that way if the economy goes bad or I lose business, I'm not held responsible for payments on stuff or have to do a fire-sale to avoid going belly up.

This business is so unstable with the amount of lowballers and illegitimate hacks that you never know whats going to happen.


Quote:
Originally Posted by grandview (2006) View Post
I think some guys are lucky to keep 10 bucks in their account and hope money comes in before the next payment is due.
I could not agree more. I do seem to notice a pattern with people here on LS and some local people I know though, and this is in now way meant to offend anyone: It seems like the guys with newer trucks, newer machines and overall "doing well for yourself" image are the younger guys that are still living at home, not married and have no "real" expenses (mortgage/rent, utility bills, grocery bills, etc). I'll be the first to admit that if I was not married and not living on my own that I would probably be driving a brand new truck and have 2 more new mowers on my trailer, but I also wouldnt trade where I am now for the other way around. Personally, it doesnt bother me that my newest truck is a 2006, and my newest mower is a 2011. I am very conscious about maintenance and making sure everything is kept clean and looking sharp, but I dont really care that I drive a 7 year old truck. Some people ask me if its a brand new one haha but the most important part to me is that I own it 100% and I could close up shop tomorrow and every vehicle and piece of equipment associated with my business is mine, and that right there makes me sleep a hell of a lot better at night. Now, if only the education system in NY wasnt so broken and my wife could get a teaching job to help pay off her $80,000 is student loans, I'd REALLY sleep good!
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  #10  
Old 03-21-2013, 05:18 PM
ncknaklawns ncknaklawns is offline
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Agreed with most stuff here. I finance mowers and trucks with themselves as collatoral. With 0% for 1-3 yrs why not put it off. Vehicle loans at under 3% the amount of interest on 30K 5 yrs is minimal. That being said I purposely made sure I was down to under 1k in bank account in March to save by prepay on the 5% stuff the previous year.
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