SFSA Business Outlook 2010 Raymond Monroe 815-455-8240 monroe@sfsa.org
http://blog.american.com/?p=2991
Agriculture Workers http://www.worldmapper.org/display.php?selected=128
Population http://www.worldmapper.org/display.php?selected=2
Industrial Workers http://www.worldmapper.org/display.php?selected=130
Service Workers http://www.worldmapper.org/display.php?selected=132
U.S. Manufacturing 2008 manufacturing was $1.4 trillion 9 th largest economy/ size of Canada 70% R&D $147 billion 90% of patents $1.00 produces $1.37 of activity 3.4%/year productivity for 20 yrs compared to 2.2%/yr for others 22% higher wages than services http://www.connstep.org/files/file/20091216 manufacturing framework final_embargoed.pdf
Steel Casting Production in the U.S. million tons 2.5 2 Million Tons U.S. 1.5 1 0.5 0 Year
Steel Foundries in North America 400 350 300 250 200 150 100 50 0 1860 1880 1900 1920 1940 1960 1980 2000 2020
Production and Capacity 3000 2500 production capacity 2000 thousand tons 1500 1000 500 0 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009
United States Steel Production 160,000,000 140,000,000 120,000,000 100,000,000 80,000,000 60,000,000 40,000,000 20,000,000 0 1900 1908 1916 1924 1932 1940 1948 1956 1964 1972 1980 1988 1996 Tons 2004 R^2= 0.72 Slope = 0.02
Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 80 60 40 20 0-20 -40-60 Carbon & Low Alloy Casting Market Trends Shipments steel shipments Percent Change %
Cast Shipments 1943-04 23000 21000 R^2 =0.51 Slope= 0.1 19000 17000 15000 13000 11000 9000 7000 '55 '75 '95 2003
Interest Rates %change Prime Rate R^2=0.33 Slope = 0.37 %change Moody s aaa R^2=0.002
Price Index
Ratio of nondurable good to GDP implicit price deflator 1.4 1.35 1.3 1.25 1.2 1.15 1.1 1.05 1 0.95 0.9 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 2020
Price of Oil
Nondefense Capital Goods New orders Air %change R^2=0.32 Slope = 0.37
Profits v production steel foundries with assets $2 10MM 30.0 25.0 20.0 15.0 10.0 Gross Profit Operating Profit Profit before Taxes 5.0 0.0 0.500 0.600 0.700 0.800 0.900 1.000 1.100 1.200 1.300 1.400 1.500 5.0
Return on Assets steel foundries with assets $2 10MM 35.0 30.0 25.0 20.0 15.0 10.0 5.0 0.0 0.500 0.600 0.700 0.800 0.900 1.000 1.100 1.200 1.300 1.400 1.500 5.0 10.0
Profits v. ROA steel foundries with assets $2 10MM 30.0 25.0 20.0 15.0 10.0 Gross Profits Operating Profits Profit before taxes 5.0 0.0 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 5.0
Return on Net Worth 100.0 steel foundries with assets $2 10MM 80.0 60.0 40.0 20.0 0.0 0.500 0.600 0.700 0.800 0.900 1.000 1.100 1.200 1.300 1.400 1.500 20.0
Current Ratio Steel Foundries $2-10 Million Assets Total Current Assets / Total Current Liabilities Target = 2 3.5 3.0 2.5 Current Ratio 2.0 1.5 Current-Median Upper Current-Median Current-Median Lower 1.0 0.5 0.0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Year
Quick Ratio Steel Foundries $2-10 Million Assets Cash & Equivalents & Trade Receivable (Net) / Total Current Liabilities Target = 1 2.5 2.0 Quick Ratio 1.5 Quick-Median Upper Quick Median 1.0 Quick Median Lower 0.5 0.0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Year
Fixed/Worth Steel Foundries $2-10 Million Assets Net Fixed Assets / Tangible Net Worth Target =.75 3.0 2.5 Fixed/Worth 2.0 1.5 Fixed / Worth-Median Upper Fixed / Worth-Median 1.0 Fixed / Worth-Median Lower 0.5 0.0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Year
Fixed Assets as a function of Net Worth steel foundries with assets $2 10MM 40.0 35.0 30.0 25.0 20.0 15.0 25.0 27.0 29.0 31.0 33.0 35.0 37.0 39.0 41.0 43.0 45.0
The laws of thermodynamics in very basic lay person language are thus: 1. You cannot win. 2. You cannot break even. 3. You must play the game and lose badly every time.
Thanks! Questions? Raymond Monroe 815-455-8240 monroe@sfsa.org
Return on Net Worth steel foundries with sales $10 25MM 140 120 100 80 60 median upper median median lower 40 20 0 0.500 0.600 0.700 0.800 0.900 1.000 1.100 1.200 1.300 1.400 1.500 20
Return on Assets steel foundries with sales $10 25MM 35.0 30.0 25.0 20.0 15.0 10.0 upper median median lower median 5.0 0.0 5.0 0.500 0.600 0.700 0.800 0.900 1.000 1.100 1.200 1.300 1.400 1.500 10.0
Profits and ROA steel foundries with sales $10 25MM 30.0 25.0 20.0 15.0 gross profit operating profit profit before taxes 10.0 5.0 0.0 0.0 5.0 10.0 15.0 20.0 25.0
Profits v production steel foundries with sales $10 25MM 30.0 25.0 20.0 15.0 gross profit operating profit profit before taxes 10.0 5.0 0.0 0.500 0.600 0.700 0.800 0.900 1.000 1.100 1.200
Other factors and ROA steel foundries with sales $10 25MM 60.0 50.0 40.0 30.0 ebit/interest return on net worth sales/net fixed assets 20.0 10.0 0.0 0.0 5.0 10.0 15.0 20.0 25.0
25.0 EBIT/Interest steel foundries with assets $2 10MM 20.0 15.0 10.0 5.0 0.0 0.500 0.600 0.700 0.800 0.900 1.000 1.100 1.200 1.300 1.400 1.500 5.0
Correlation of production and finances steel foundries with assets $2 10MM 45.0 40.0 35.0 30.0 25.0 20.0 net worth Operating Profit 15.0 10.0 5.0 0.0 0.500 0.600 0.700 0.800 0.900 1.000 1.100 1.200 1.300 1.400 1.500
Correlation of production and finances steel foundries with sales $10 25 MM 80.0 70.0 60.0 50.0 40.0 total current assets operating profit 30.0 20.0 10.0 0.0 0.500 0.600 0.700 0.800 0.900 1.000 1.100 1.200 1.300 1.400 1.500
Trade Receivables Turnover Steel Foundries $2-10 Million Assets Net Sales / Trade Receivables (Net) Target = At or Slightly Above Industry Average 12.0 11.0 Trade Receivables Turnover 10.0 9.0 8.0 7.0 Trade Receivables Turnover - Median Upper Trade Receivables Turnover - Median 6.0 5.0 Trade Receivables Turnover - Median Lower 4.0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Year
Days' Receivable Steel Foundries $2-10 Million Assets 365 / Trade Receivables Turnover Target = At or Lower Than Industry Average 75.0 70.0 65.0 Days' Receivable 60.0 55.0 50.0 45.0 Days Receivable - Median Upper Days Receivable - Median Days Receivable - Median Lower 40.0 35.0 30.0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Year
27.0 Inventory Turnover Steel Foundries $2-10 Million Assets Cost of Sales / Inventory Target = At or Slightly Above Industry Average 22.0 Inventory Turnover 17.0 12.0 Inventory Turnover -Median Upper Inventory Turnover -Median Inventory Turnover -Median Lower 7.0 2.0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Year
Days' Inventory Steel Foundries $2-10 Million Assets 365 / Inventory Turnover Target = At or Slightly Below Industry Average 120.0 100.0 Days' Inventory 80.0 60.0 Days' Inventory - Median Upper Days' Inventory - Median Days' Inventory - Median Lower 40.0 20.0 0.0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Year
Trade Payables Turnover Steel Foundries $2-10 Million Assets Cost of Sales / Trade Payables Target = Industry Average 30.0 25.0 Trade Payables Turnover 20.0 15.0 10.0 Trade Payables Turnover-Median Upper Trade Payables Turnover-Median Trade Payables Turnover-Median Lower 5.0 0.0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Year
Days' Payable Steel Foundries $2-10 Million Assets 365 / Trade Payables Turnover Target = Industry Average 80.0 70.0 60.0 Days Payable 50.0 40.0 Days' Payable-Median Upper Days' Payable-Median 30.0 Days' Payable-Median Lower 20.0 10.0 0.0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Year
Working Capital Turnover Steel Foundries $2-10 Million Assets Net Sales / Net Working Capital Target = At or Above Industry Average 100.0 80.0 60.0 Working Capital Turnover 40.0 20.0 Working Capital Turnover -Median Upper Working Capital Turnover -Median Working Capital Turnover -Median Lower 0.0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008-20.0-40.0 Year
Return on Net Worth Steel Foundries $2-10 Million Assets Profit Before Taxes / Tangible Net Worth Target = Industry Average 100.0 80.0 60.0 Return on Net Worth 40.0 Return on Net Worth-Median Upper Return on Net Worth-Median Return on Net Worth-Median Lower 20.0 0.0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008-20.0 Year
Return on Assets Steel Foundries $2-10 Million Assets Profit Before Taxes / Total Assets Target = Industry Average 35.0 30.0 25.0 20.0 Return on Assets 15.0 10.0 5.0 Return on Assets- Median Upper Return on Assets- Median Return on Assets- Median Lower 0.0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008-5.0-10.0 Year
Asset Turnover Steel Foundries $2-10 Million Assets Sales / Total Assets Target = Industry Average 4.0 3.5 3.0 Asset Turnover 2.5 2.0 Sales/Total Assets-Median Upper Sales/Total Assets-Median 1.5 Sales/Total Assets-Median Lower 1.0 0.5 0.0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Year