HAVERTY FURNITURE COMPANIES, INC: Labor Productivity Benchmarks and International Gap Analysis

 Published On: May, 2013 |    No of Pages: 60 |  Published By: Icon Group International, Inc | Format: PDF
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1 Introduction & Methodology
1.1 What does this report cover?

Are the combined human resources at Haverty Furniture Companies, Inc productive? There is no absolute answer to this question. This report considers the extent to which the company's labor deployment indicators differ from global benchmarks. In this report we consider forecasts of differences between labor ratios and the resulting return on this human investment compared to global benchmarks; the estimation of such differences is commonly called a "gap analysis." What is the ratio of short-term and long-term assets to employee? What are typical capital-labor ratios? How different are these ratios to companies serving the same link in the value chain? What are the average sales and net profits per employee compared to global benchmarks? These and over 50 other indicators of labor productivity and utilization are considered in this report. The report does so by going beyond traditional analyses by considering companies competing in the same or similar industrial classification at a global level.

The goal of this report is to save the reader time. It is designed to assist consultants, human resource managers, strategic planners, and corporate officers in gauging estimates of a company’s human resource indicators compared to firms competing or participating in the same economic sector, at the global level. This report is not about whether a particular company or industry has performed well or poorly in the past or will do so in the future. With the globalization of markets, greater foreign competition, and the reduction of entry barriers, it becomes all the more important to benchmark a company’s human resource indicators against other firms on a worldwide basis. Doing so, however, is not an obvious task. First, one needs to find firms competing in the same sector, but not necessarily competing directly with the company in local markets. These firms should not be perceived, therefore, to be direct competitors to the company in question, but simply those that have been classified by various sources (e.g. EDGAR or similar foreign filings), as competing to serve customers in the same link of the value chain, or broad industrial classification, as identified by SIC, NAICS or similar codes. Second, given the international nature of the task, one needs to control for exchange rate volatility. Finally, one needs use comparable financial standards.

1.2 Methodology

This report analyzes deviations between Haverty Furniture Companies, Inc and international labor-productivity and utilization benchmarks. In consultation with Aaron Freeman, President, IFAS LLC., who assisted me in the preparation of this report (including its methodology, locating comparable international information, and identifying globally comparable industry classification systems), the following chapters report a labor-ratio analysis of Haverty Furniture Companies, Inc vis-à-vis global benchmarks. In contrast to this report, most productivity and utilization studies focus on benchmarking against domestic ratios, often published by government agencies or commercial sources (e.g. Value Line, Dun and Bradstreet, and Standard & Poor’s). In their discussion of financial statement analysis and ratios, Skim and Siegel note that such comparisons (p. 43-44) :

… allows you to answer the question, “How does a business fare in the industry?” You must compare the company’s ratios to… industry norms. [1]

In this report, I calculate an industry labor-productivity and/or labor-utilization norms by looking at firms at the global level, as opposed to a local level. In what follows, I will describe the seven-stage methodology used in performing this analysis. Each stage should be seen as a working assumption behind the numbers presented in later chapters.

Tables of Contents

1 Introduction & Methodology (free to view)
1.1 What does this report cover?
1.2 Methodology
1.3 Limitations
1.4 Extensions

2 Asset-Labor Ratios & Benchmarks
2.1 Overview
2.2 Asset Definitions
2.3 Human Resources to Assets: 2002
2.4 Competitive Gaps: Labor-Asset Ratios
2.5 Key Percentiles and Rankings
2.5.1 Cash & Short Term Investments
2.5.2 Receivables (Net)
2.5.3 Total Inventories
2.5.4 Current Assets - Total
2.5.5 Property Plant and Equipment - Net
2.5.6 Accumulated Depreciation - Total

3 Liability-Labor Ratios & Benchmarks
3.1 Overview
3.2 Liabilities and Equity Definitions
3.3 Human Resources to Liabilities: 2002
3.4 Competitive Gaps: Labor-Liability Ratios
3.5 Key Percentiles and Rankings
3.5.1 Accounts Payable
3.5.2 Current Liabilities - Total
3.5.3 Long Term Debt
3.5.4 Total Liabilities
3.5.5 Retained Earnings

4 Income-Labor Ratios & Benchmarks
4.1 Overview
4.2 Income Statement Definitions
4.3 Human Resources to Income: 2002
4.4 Competitive Gaps: Labor-Income Ratios
4.5 Key Percentiles and Rankings
4.5.1 Cost of Goods Sold (Excluding Depreciation)
4.5.2 Selling, General & Administrative Expenses
4.5.3 Operating Income
4.5.4 Earnings Before Interest and Taxes (EBIT)
4.5.5 Pretax Income
4.5.6 Income Taxes

5 Disclaimers, Warrantees, and User Agreement Provisions
5.1 Disclaimers & Safe Harbor
5.2 ICON Group User Agreement Provisions
5.3 Financial Glossaries: Bibliography

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