New AKTRIN Report on The Financial Health of the American Furniture Industry

Furniture World Magazine

The study deals with the revenue and cost structure of the American furniture industry. The profitability is compared to alternative investments, and we ask whether company owners earn an adequate return. The study continues to analyze the industry's financial health. Ratios concerning debt and equity, liquidity, short term capital employment (receivables, inventory) are presented in numerous tables. Finally, financing sources (banks, leasing, debentures) are discussed, indicating their advantages and disadvantages. Our findings are segregated by industry segment, company size, and region. The main conclusions of the report are very positive. The study gives a clean bill of health to the industry. Even better, many of the key financial ratios have improved during the past year. However, the author of the report cautions that the generally healthy state of the industry should not hide the fact that some companies are highly leveraged. When demand sags, an inadequate capital foundation is one of the most frequent causes of business failure. Even under favorable business conditions, a thin capital base and a high debt load can jeopardize otherwise lucrative investment opportunities. AKTRIN is a report writing and international consulting firm fully dedicated to the furniture industry. The company has been in existence since 1985 and maintains offices in the United States and Canada. Representatives and affiliates are located throughout the world. E-mail address is: aktrin@aktrin.com