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Sageworks: Private Companies Well Positioned to Borrow

May 03, 2013, 06:59 AM
Filed Under: Economic Commentary

Acording to the latest Private Company Report by Sageworks, private companies in the United States saw annual sales growth of more than 10% in the period ended March 2013, slightly above the previous period and the growth seen one year ago. On average, private-company sales increased 10% in the period ended February 2013 and 10.1% in the period ended March 2012.
Based on financial statements from the six months ended March 2013, the average private company had a 7.3% net profit margin compared to 4.5% a year earlier. Net profit margin is adjusted to exclude taxes and include owner compensation in excess of their market-rate salaries. These adjustments are commonly made to private-company financials in order to provide a more accurate picture of the companies’ operational performance.
Private company credit risk, according to the latest Sageworks report, appears to be headed in the right direction, and companies may be well positioned to borrow. 
Hamilton pointed out the strong performance of private construction companies, noting that the construction resurgence may not be a flash in the pan.  “It looks as if construction is back to stay,” said Hamilton, “at least for now.” 
Read the full Sageworks Private Company Report.

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