Private Company Likelihood of Default Improving; Companies May Be Positioned to Borrow

On May 28, Sageworks released its latest Private Company Report, a monthly update on the health and state of privately held US companies. 
 
According to the report, private companies continued to grow at a healthy pace and experienced strong profit margins in the most recent period. Companies filing annual statements between November 2012 and April 2013 reported annual sales growth of about 10 percent. On average, these companies also reported net profit margins close to 7 percent, a full two percentage points higher than the previous year.
 
In an analysis focusing on seasonal industries, several "summer industries," such as restaurants and sporting goods stores, have posted higher sales growth rates during the past year than they did previously. Others, including gas stations, have seen a sharp drop in annual sales growth compared to last year.
 
Sageworks Chairman Brian Hamilton pointed out that the average probability of default for private companies appears to be headed in the right direction. "Despite this improvement in creditworthiness, companies appear to be taking on less debt than a year ago," Hamilton said. "The improvement in default rates coupled with healthy sales and profitability show that private companies may be well positioned to borrow." 
 
Sageworks' monthly report on the state of privately held companies in America includes metrics on the average US privately held company as well as the performance of notable sectors and industries. Access the full report, including sector breakout and further analysis. 
 
About Sageworks:
Sageworks is a financial information company based in North Carolina that provides risk management solutions to financial institutions. Sageworks' data and applications are used by thousands of financial professionals across North America. The company has been named to the Inc. 500 list of the fastest-growing privately held companies in the United States and to Deloitte's Technology Fast 500.
 
Source: Sageworks
 

You may like these other stories...

School tax breaks get House support as Democrats objectRichard Rubin of Bloomberg reported that the House of Representatives on Thursday voted to expand and simplify tax breaks for education as Republicans continue to pass...
The Financial Accounting Standards Board (FASB) has relaunched its technical agenda web page, which Chairman Russell Golden said will inform visitors at a glance on where any given FASB project stands, the steps it took to...
Tax accounting to be simplified for money-market fundsThe US Securities and Exchange Commission (SEC) voted 3-2 on Wednesday for sweeping changes to institutional money-market funds, Emily Chasan, senior editor of...

Upcoming CPE Webinars

Jul 31
In this session Excel expert David Ringstrom helps beginners get up to speed in Microsoft Excel. However, even experienced Excel users will learn some new tricks, particularly when David discusses under-utilized aspects of Excel.
Aug 5
This webcast will focus on accounting and disclosure policies for various types of consolidations and business combinations.
Aug 20
In this session we'll review best practices for how to generate interest in your firm’s services.
Aug 21
Meet budgets and client expectations using project management skills geared toward the unique challenges faced by CPAs. Kristen Rampe will share how knowing the keys to structuring and executing a successful project can make the difference between success and repeated failures.