Each of the financial models addresses an important financial decision in your construction business using break-even analysis.
Some of the models provide simple answers to straight-forward questions.
Other of the models are more complicated and require more inputs.
All of the Break-even Analysis models will require that you have:
Previous period Total Sales – typically your annual sales found on your Income Statement;
Previous period Direct Job Costs – typically your annual Cost of Goods Sold found on your Income Statement;
Previous period Fixed Costs – typically the costs related to running your construction business. Also called General and Administrative, or G&A, costs found on your income statement.
There are other financial factors you may need to generate as part of the analytical process.
Depending on the area of analysis, you may need to determine the:
Amount of the raise you are considering;
Target amount for profit;
Percentage of direct costs represented by Materials or Labor. Depending on your accounting process, you may have to make some assumptions here;
Target increased amount of your marketing budget;
Average contract price of a new project;
Acquisition and maintenance costs of new equipment;
Anticipated reductions in direct materials and direct labor costs;
Anticipated loan amounts and loan terms;
Salaries and loads for new hires; and
Additional information.
Each of the results (generally in light orange cells) will provide important information to assist you in making reasoned financial decisions.
Many of the models also offer suggestions or explanation of the analysis results in the blue cells.
Every effort has been made to provide accurate information. However, if the input numbers or the calculations lack accuracy, please contact Builder Resources to discuss.
You can print pages by selecting the “Print” button at the bottom left of the analysis template.