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Builder Profits Nearing 2006 Levels
Monday, March 21, 2016
The average single family builder achieved revenue of just over $16 million in 2014 and posted an average net pre-tax profit of $1 million. The National Association of Home Builders (NAHB) derived those numbers for its newly released Cost of Doing Business Study from a nationwide survey of builders about their income statements and balance sheets.
The cost of achieving that revenue, that is the cost of sales, averaged $13.2 million per builder or 81.1 percent of revenue. Those costs include land and direct and indirect costs of construction. This results in a gross profit of $3.1 million. Operating expenses including the owner's draw, sales and marketing and general and administrative expenses took another $2 million. The remaining net pre-tax profit represents a 6.4 percent profit margin.
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