Math, management, software, problem-solving and communication. Anyone hoping to do well in the construction business needs those skills and more to pull it off.
Accounting skills don’t hurt, either, but for most general contractors, finding the time to get it all done is always a problem.
We’re not talking about simply recording debits and credits. We’re talking about digging into your balance sheet and income statements to come up with commonly used financial performance ratios. These ratios are based looking at two or more numbers to gauge the profitability, solvency and efficiency of your business.
With all of that in mind, here’s a quick look at four key performance ratios that can help you keep your business on track, not to mention give surety underwriters the peace of mind they need when you’re in the market for a bond.
There’s more on all of this, as you might image. But tracking solvency, liquidity, profitability and other key performance ratios, or KPIs, are critical to understanding how well you’re running your construction business. Whether you’re thinking about obtaining a bond or not, you can use these ratios to see where your business is doing well and where it needs attention.
Tom Patton is a Surety and Insurance Advisor with CCIG. Reach him at TomP@thinkccig.com or 720-330-7922.
CCIG is a Denver-area insurance brokerage with surety clients nationwide. We also help you lower your long-term cost of insurance with our risk and claims management expertise and a commitment to service excellence.
Also read: 9 Warning Signs that Sureties Watch For