DICUSSION 1 & 2

9 . 2 3 . 2 0 1 3 NAICS CODES: 5416

SIC CODES: 8742, 8748

INDUSTRY PROFILE

Consulting Services

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Companies in this industry provide management, scientific, and technical consulting services, including specialized services such as environmental, human resources, IT, logistics, and marketing consulting. Major companies include Booz Allen, Deloitte Consulting, IBM Global Services, and McKinsey & Company, (all based in the US), as well as Accenture (Ireland), Roland Berger (Germany), and Tata Consultancy Services (India).

The worldwide consulting services industry generates about $300 billion in revenue annually. The US and Europe are the largest markets for consulting services, but global firms are targeting other industrialized regions with emerging economies for growth. The size and economic growth of China and Brazil, in particular, have attracted major investments from consultancies.

The US consulting services industry includes about 130,000 firms with combined annual revenue of about $160 billion. Key growth drivers include corporate profit levels, major changes to regulatory requirements, and the emergence of new technologies.

Demand is driven by the needs of businesses, nonprofit institutions, and government agencies for outside advice. The profitability of individual companies depends on the efficiency of their operations and their ability to maintain a steady flow of business. Large firms have advantages in being able to offer broad ranges of services and to take on more complex projects. Small firms can compete effectively by specializing. The US industry is fragmented: the top 50 companies account for less than 30 percent of industry revenue.

Management consulting services, including consulting related to strategic planning, marketing, and human resources, account for about 80 percent of US industry revenue. Other major revenue sources include scientific and technical consulting services (12 percent) and environmental consulting (about 8 percent).

Management consultants advise senior and middle managers about the operations or strategic direction of various functions in the client organization, such as finance, HR, logistics, marketing, and operations. Scientific and technical consultants provide advice related to economic, environmental, safety, security, and other issues. Most consulting jobs are project-oriented assignments, also called "engagements." Clients usually send a request for proposal (RFP) to several potential consultants; consulting firms respond with a proposal that specifies the approach the firm would take to address the task, the resources it would use, a timetable, the "deliverables" it would provide, and an estimated cost. Most consulting assignments involve a period of study or research, followed by formulation of possible solutions. The major deliverable is usually a report or action plan.

Technology plays an increasingly important role in consulting services. Firms often pitch and develop complex software solutions, including enterprise resource planning (ERP); customer relationship management (CRM); or sales force automation (SFA). Many general management consulting firms have a division or sister company that specializes in IT consulting; often, the two work together to present an "end-to-end" solution for clients.

Typical customers are big enterprises from various industries, such as banking institutions, consumer packaged goods companies, and retailers, as well as government agencies.

Marketing is most often indirect, and includes hosting seminars or participating in industry conferences and trade shows, and mailing materials to prospective customers. Senior members may spend most of their time in activities where they can make personal contacts with prospective clients. Partners at most firms are expected to bring in new business and work on assignments. Some firms have business development managers whose major function is to find new business. For small firms, especially, a majority of work may be repeat business from customers or referrals. Internet sales are generally in the form of capturing leads through white papers, case studies, and testimonials.

Pricing can vary depending on the firm's reputation and the size of the project. Most consulting contracts specify a maximum cost based on estimated days of work multiplied by the billing rates of those who will work on the assignment. Administrative and other expenses are often priced at a "cost-plus" premium. Contracts often specify a substantial initial payment from the client and monthly billings. Fixed-price contracts are common in government work. Although cost is a major factor for clients in deciding which consulting firm to choose, reputation and experience can be more important.

Industry Overview

Competitive Landscape

Products, Operations & Technology

Sales & Marketing

Finance & Regulation

Gross margins can be high, averaging about 70 percent of net sales. Accounts receivable can be in excess of 80 days sales. Smaller consulting firms may have difficulty collecting from clients, particularly during difficult economic times or when the client is downsizing. Consulting firms have few physical assets beyond office space and computers, and therefore few capital requirements and little inventory.

Since the consulting industry relies heavily on intellectual capital, labor is the most significant expense. Labor costs typically run from 30 to 50 percent of revenue and can be even higher for small firms. Average annual revenue per worker in the US is about $140,000.

The consulting industry is lightly regulated. Firms that contract with the federal government are held to greater accountability standards. Government clients have rights and remedies not typically found in commercial contracts, including the right to hold back funds, terminate funding, claim rights in products or patents developed by the consulting firm, and audit company finances.

Globally, the consulting services industry generates more than $300 billion annually. Major management consulting companies based outside the US include Accenture (Ireland), Roland Berger (Germany), and Tata Consultancy Services (India). Leading environmental consulting firms include Arcadis (The Netherlands), Golder Associates (Canada), and Environmental Resource Management (UK).

Larger consulting firms frequently have international business, either because their clients have an international component or because they themselves have foreign offices. Some firms have shifted part of their operations offshore to take advantage of lower-cost labor in foreign countries.

The US and the European Union are the largest markets for consulting services. Global firms are targeting other industrialized regions with emerging economies for growth. The size and economic growth of China and Brazil, in particular, have attracted major investments from consultancies. Other growth markets include Indonesia, Mexico, the Middle East, Russia, South Africa, South Korea, and Turkey.

Consultancies' reliance on highly trained professionals makes hiring a crucial challenge, one that is magnified as the companies expand geographically. A consultant with the necessary experience and education to work in one market may lack the language skills or knowledge of local business practices to operate in another. Firms may form partnerships with local operators or turn to subcontractors to establish a presence in a new region.

Acquisitions are another way for consulting firms to expand geographically. Consolidation is common across the industry as a whole, but acquisitions in foreign markets come with unique risks. Companies may be challenged with complying with local regulatory and legal requirements, and integration of new operations can require significant resources.

US demand for consulting services generally correlates with population levels. California, New York, Illinois, and Texas are top states for consulting sales. Leading metro areas include New York; Washington, DC; Chicago; and Los Angeles.

Average wages for the consulting industry in the US are significantly higher than the national average. Professionals in the industry generally have advanced education and high-level technical training. Potential partners in top-tier firms typically must have an MBA or other advanced degree. Injuries are minimal.

Industry Employment Growth Bureau of Labor Statistics

International Insights

Regional Highlights

Human Resources

Average Hourly Earnings & Annual Wage Increase Bureau of Labor Statistics

Demand: Driven by economic and business complexity Need efficient operation and steady flow of business Risk: Increased liability and economic pressures on client spending

Industry Growth Rating

Trend: Demand for Consulting Services on the Rise - Consulting firms in the US are expanding their ranks as the economy improves and businesses rebound. Employment at US management and technical consulting firms, which has risen steadily for the last two years, increased 5 to 6 percent year-over-year each month from January to August 2013. Demand for consulting services is closely tied to the health of the economy and specifically business growth. Corporate profits rose 5 percent during second quarter 2013 compared to the same period a year ago. The Big Four accounting firms - PricewaterhouseCoopers, KPMG, Deloitte, and Ernst & Young - are among the consulting companies that are expanding their workforces as the economy improves, according to The Wall Street Journal.

Industry Impact - Consulting services will likely see increased competition to hire and retain experienced workers as industry demand grows.

Quarterly Industry Update

9.23.2013

US corporate profits, an indicator of corporate demand for consulting services, rose 5 percent in the second quarter of 2013 compared to the same period in 2012.

Total US manufacturers' shipments, an indicator of economic health that may affect consulting service demand, rose 1.7 percent year-to-date in September 2013 compared to the same period in 2012.

Total US revenue for management, scientific, and technical consulting services rose 5 percent in the second quarter of 2013 compared to the previous year.

Industry Indicators

The output of US consulting services is forecast to grow at an annual compounded rate of 5 percent between 2013 and 2017. Data Published: September 2013

First Research forecasts are based on INFORUM forecasts that are licensed from the Interindustry Economic Research Fund, Inc. (IERF) in College Park, MD. INFORUM's "interindustry-macro" approach to modeling the economy captures the links between industries and the aggregate economy. Forecast FAQs

Industry Forecast

Changes in the economic environment that may positively or negatively affect industry growth.

Data provided by First Research analysts and reviewed annually

Energy Prices Change in crude oil and related energy prices

Government Regulations Changes in federal, state, or local government regulations or business- related policies

Commodity Prices Changes in prices for commodities, such as crops, metals, and other raw materials

Industry Drivers

Critical Issues

Dependence on Economic Growth - Consulting revenue depends on economic growth, and especially on corporate profits. Consultants are considered an expendable cost (or one that can at least be delayed) when companies face an economic slowdown. During recessions, corporate profits may fall significantly.

Employee Attrition - Consulting firms depend heavily on the intellectual capital of employees, yet most companies face high levels of voluntary attrition. The typical employee tenure at a major consulting firm is around two years; companies regularly face annual attrition rates of 10 percent or more. Work conditions are difficult, as long hours and extensive travel are the norm. Companies spend significant resources recruiting new employees and providing incentives to retain them.

Customer, Industry Concentration - Aside from the large consulting firms, most consultants specialize in providing services to a particular company or industry, leaving them vulnerable to customer and industry changes. Small consulting firms may get the majority of revenue from a handful of clients.

Sharing Knowledge - Consultants often neglect to share insights from previous engagements with co-workers. The average length of a consulting engagement has fallen in recent years. With this rapid rotation of clients, individual consultants are gaining knowledge from a wide range of experiences, but not necessarily sharing these lessons with other consultants. Clients often buy services because of a firm's expertise, yet their assigned team may not have worked on any relevant engagements. Some companies invest heavily in knowledge management systems (KM systems) to capture and share the firm's collective expertise.

Increased Liability for Results - As consultants take on larger roles within companies, the risk of failure and damage to their reputation increases. Consultants are more likely to be named in lawsuits against corporate clients and in lawsuits by clients.

Business Challenges

Industry Consolidation - Small and midsized consulting firms face greater competition from bigger firms that can offer clients a variety of services. Big firms are adding fields of expertise through acquisitions, often buying the consulting practices and other nonaudit services of accounting firms. Large firms are expanding their reach into areas once served mainly by small consultants.

Greater Use of Consultants - The evolution of many US companies to a leaner business model has created greater demand for consultants. The expertise to structure and direct the operations of complicated businesses is difficult for many corporations to get internally, especially in rapidly evolving industries. Many US businesses now retain consultants as a matter of course, not just when they perceive a problem.

Consultants Expanding Services - Many consulting firms have expanded their areas of expertise in a bid to become one-source service providers to corporate customers. Many traditional management consultants have added expertise in IT and HR, which have become important strategic factors in traditional fields like finance, marketing, and production.

More International Work - Consulting firms have followed the expansion of US corporations abroad and benefited from the greater volume of international mergers and acquisitions, which often require the help of consultants. Many consulting specialties have easily translated abroad.

Assignments with Contingency Fees - With corporate clients demanding a strong ROI on consulting services, many major consulting firms are accepting contingency payments as a part of their fee structure. Some consulting firms position themselves as worthy of pay only when the client demonstrates an improved bottom line; others take on projects with an equity-like investment in project work.

Business Trends

Health Care Consulting - The rapid growth of the health care sector and the rapid evolution of new medical process improvements are increasing the need for experts who can help hospitals and other industry participants provide more efficient health care. US health care spending is expected to rise to 20 percent of GDP in 2021 (from 18 percent of GDP in 2011).

HR Consulting - The need to attract, retain, and manage the right kinds of employees has become an important

Industry Opportunities

management concern in many companies. Experts suggest HR consulting practices can help companies determine how engaged employees are and incorporate new practices that improve overall efficiency and morale.

Government Consulting - Increases in federal spending on a variety of projects provide new opportunities for consulting firms. Companies must be able to navigate a complex RFP process and become a preferred government contractor; those that are able to work their way into government consulting can often build a strong network among federal and state agencies.

Building Customer Relationships New customers are often found through personal contacts with senior executives. To meet potential customers, the CEO may attend business conferences, participate in seminars, join industry associations, write op-ed pieces for trade journals, or sponsor special events. Maintaining personal ties with customers is important, as many consulting firms depend on repeat business and referrals.

Planning for Changes in Market Demand Because much consulting is highly specialized, firms must anticipate future demand. This problem is especially common in technology consulting, as innovations can make technology obsolete. Firms that foresee new areas of service typically hire industry or academic experts to build a practice.

Planning for Uneven Cash Flow Because most consulting assignments last less than a year, consulting firms can have very uneven cash flow. Many small firms use a business model calling for 50 percent of a professional's time to be billed, 25 percent of time to be spent marketing, and 25 percent of time to be used to enhance professional skills. To even out cash flow, small firms may work part-time on several drawn-out projects at once.

Determining Competitive Billing Rates Billing rates change depending on market conditions. During periods of rapid technological change, demand for consulting services can exceed availability and prices rise. Rates fall rapidly in economic contractions when client consulting budgets dry up. The cost of most consulting assignments is determined by multiplying the hours of billable work required by an hourly rate and adding allowable expenses (travel, materials, etc). Because many assignments are won through competitive bidding, firms must be aware of prevailing rates.

Providing New Research Tools The work of many consultants involves market research, for which many Internet sources are available. In addition to finding relevant government data sources, most of which are free, firms must identify and evaluate commercial sources of information and analysis. Research tools and sources allow consulting companies to focus on strategic issues rather than on the compilation of data.

Improving Communication Systems High-speed, secure, and reliable communication systems have become critical to meet the need for more access to data and greater collaboration among consultants. Devices like smartphones and laptop computers, wireless data transmission networks, and Internet collaboration services like WebEx and Salesforce.com must be evaluated and supported. Small firms may contract information specialists to provide communication support.

Recruiting and Training Professional Staff Because of the high technical skills required by consulting companies, hiring and training employees can be difficult. Small firms typically pay less than large firms for junior consultants. Recruiting senior consultants is especially difficult for small firms that depend on close interaction among consultants. Specialist firms must provide continuous training to stay abreast of industry developments.

Building Contacts with Occasional Experts Many firms hire outside experts for brief periods to help in specific assignments. These may be independent consultants or experts with academic credentials. Firms identify experts through recommendations, conferences, or personal contacts, and must build relationships with them before their services are actually needed.

Executive Insight

Chief Executive Officer - CEO

Chief Financial Officer - CFO

Chief Information Officer - CIO

Human Resources - HR

VP Sales/Marketing - Sales

Building Partnerships with Other Consultants Many small firms work as subcontractors for other consultants or collaborate with other small firms on large projects. Such relationships require frequent contact with potential partners and mutual understanding of capabilities. As consulting needs become more specialized, multi-firm partnerships are more common.

Preparing Consulting Proposals Although some consultants get non-bid work from existing customers, most must prepare detailed proposals for the work they hope to receive. Potential customers may or may not compensate firms for the time they spend to prepare a proposal. Customers typically ask for proposals from three or more firms; government contracts may have many bidders.

What are the company's primary sources for new customers? New customers are often found through personal contacts with senior executives.

How does the company identify new practices to develop? Because much consulting is highly specialized, firms must anticipate future demand for their services.

How does the company manage assignments to smooth cash flow? Because most consulting assignments last less than a year, consulting firms can have very uneven cash flow.

How does the company determine what rates to use for competitive bids? Because many assignments are won through competitive bidding, firms must be aware of prevailing rates.

What tools and sources does the company use to improve the efficiency of the research process? The work of many consultants involves market research, for which many Internet sources are available.

What technologies is the company using to improve communication among consultants? High-speed, secure, and reliable communication systems are critical for access to data and collaboration among consultants.

What challenges does the company face developing its professional staff? Because of the high technical skills required by consulting companies, hiring and training employees can be difficult.

How effectively does the firm work with outside experts? Many firms hire outside experts for brief periods to help in specific assignments.

How important are relationships with other consulting firms? Many small firms work as subcontractors for other consultants or collaborate with other small firms on large projects.

How is the company improving its proposal generation process? Although some consultants get non-bid work from existing customers, most must prepare detailed proposals for the work they hope to receive.

Executive Conversation Starters

Chief Executive Officer - CEO

Chief Financial Officer - CFO

Chief Information Officer - CIO

Human Resources - HR

VP Sales/Marketing - Sales

How are current economic conditions affecting demand and company revenue?

Call Prep Questions

Conversation Starters

Consulting revenue depends on economic growth, and especially on corporate profits.

How is the company lowering employee attrition? Consulting firms depend heavily on the intellectual capital of employees, yet most companies face high levels of voluntary attrition.

How is the company working to diversify its client list? Aside from the large consulting firms, most consultants specialize in providing services to a particular company or industry, leaving them vulnerable to customer and industry changes.

What health care-related business has the company sought? The rapid growth of the health care sector and the rapid evolution of new medical process improvements are increasing the need for experts who can help hospitals and other industry participants provide more efficient health care.

How does the company retain talented employees? The need to attract, retain, and manage the right kinds of employees has become an important management concern in many companies.

To what extent does the company bid on government contracts? Increases in federal spending on a variety of projects provide new opportunities for consulting firms.

How does the company address the challenge of hiring and retaining experienced consultants? Consulting firms in the US are expanding their ranks as the economy improves and businesses rebound.

What sort of consulting does the firm do? Services include management, business strategy, and marketing consulting.

How many employees does the firm have? Most firms have fewer than 10 employees, though large companies can employ several thousand.

How many professionals and administrative staff does the company boast? The ratio may be 2:1 in small firms, 9:1 in very large ones.

How many offices does the firm have? Firms with less than $10 million in annual revenue usually have one office.

How does the company secure consulting work? Clients usually send a request for proposal (RFP) to several potential consultants outlining the requested task.

To what extent does the company work through an established business model or consulting paradigm? Most consulting assignments involve a period of study or research, then formulation of possible solutions, and finally the production of a report.

How much travel is required of consultants? Many consultants travel five days a week and come home on weekends.

What types of clients does the company have? Major clients include Fortune 500 companies, midsized or small companies, government agencies, law firms, and banks.

How much of the firm's business is with repeat customers? Many small firms get the majority of work from repeat customers.

How dependent is the firm on a dominant customer? Some agencies rely heavily on one or two key clients.

How much of the firm's work is on multiyear contracts? Multiyear contracts are a preferred way to bill clients, generating consistent cash flow.

How does the firm find new customers? Seminars, trade shows, industry conferences, advertising, promotional mailing, or a direct sales force are traditional venues for finding potential clients.

How much time do senior members spend establishing new customer contacts? In many firms, senior members bring in most new business.

Who are the firm's major competitors?

Quarterly Industry Update

Operations, Products, and Facilities

Customers, Marketing, Pricing, Competition

Competition can come from other consulting firms, internal consulting divisions of large companies, and offshore consulting agencies.

How do competitors impact the firm's pricing strategy? Larger firms often set the standard for billing and compensation rates.

How does the company cross-sell services? Consultants increasingly offer clients a variety of services.

How much of the firm's business is outside the US? Large consulting firms may have major foreign operations.

How dependent is the firm on foreign consultants? Collaboration with offshore or international consultants is increasingly common.

How important are contracts with the federal government to overall revenue? Consulting with the federal government can be higher-risk than with the private sector due to auditing, budget cutbacks, and holdbacks in funds.

How does the company hire, train, and retain professional staff? Many firms recruit new consultants directly from graduate school. Senior consultants are often recruited from industry and academic positions. Luring employees away from other consulting firms is common.

How many part-time employees does the company have? Firms in highly technical fields may have part-time consulting arrangements with academics or other experts.

To what extent does the firm rely on internal research? Market research functions are sometimes contracted to specialist firms.

How many different levels of professional staff does the firm have? Firms are typically comprised of principals, managing directors, senior consultants, junior consultants, and analysts.

Is the staff organized into permanent specialized teams or is a new team assembled for each assignment? While some large firms operate regional offices much like franchises, with an exclusive territory, others assemble teams of experts company-wide for new assignments.

How much does revenue vary from year to year? Small firms may have significant revenue swings if they rely on a few large contracts.

What is the average dollar size of a consulting assignment? Fees vary depending on the length and complexity of the assignment and the firm's reputation.

How many assignments does the firm usually work on at one time? Most consulting companies, even small firms, manage a range of projects.

How much of a backlog of projects does the firm have? Backlog is an important predictor of future cash flow.

How heavily does the firm rely on fixed-price or maximum-cost contracts? Fixed-price contracts are common in the government sector.

How has the firm expanded the range of its expertise? Providing "end-to-end" solutions can help a consulting firm compete effectively in the global marketplace.

To what extent does the firm operate an investment portfolio? Some large firms have investments in high-tech companies to stay on the leading edge of an industry.

What particular analysis method does the company apply to client problems? Some firms have developed proprietary analysis methods that they apply to business problems.

How often does the firm use preferred hardware or software vendors? Many consulting firms have preferred vendors and system integrators. Many large consulting firms have

Regulations, R&D, Imports and Exports

Organization and Management

Financial Analysis

Business and Technology Strategies

partnership agreements with these preferred vendors.

Quick Ratio by Company Size

The quick ratio, also known as the acid test ratio, measures a company's ability to meet short-term obligations with liquid assets. The higher the ratio, the better; a number below 1 signals financial distress. Use the quick ratio to determine if companies in an industry are typically able to pay off their current liabilities.

Data Period Last Update October 2013

Table Data Format Mean

Company Size All Large Medium Small

Size by Revenue Over $50M $5M - $50M Under $5M

Company Count 170286 198 3068 167020

Income Statement

Net Sales 100% 100% 100% 100%

Gross Margin 74.3% 75.1% 73.5% 74.4%

Officer Compensation 3.6% 2.8% 3.2% 4.1%

Advertising & Sales 0.4% 0.5% 0.4% 0.4%

Financial Information

COMPANY BENCHMARK TRENDS

Financial industry data provided by MicroBilt Corporation collected from 32 different data sources and represents financial performance of over 4.5 million privately held businesses and detailed industry financial benchmarks of companies in over 900 industries (SIC and NAICS). More data available by subscription or single report purchase at www.microbilt.com/firstresearch.

COMPANY BENCHMARK INFORMATION

NAICS: 5416

Other Operating Expenses 64.0% 65.3% 63.8% 63.7%

Operating Expenses 68.1% 68.5% 67.5% 68.2%

Operating Income 6.2% 6.6% 6.0% 6.2%

Net Income 3.6% 3.8% 3.4% 3.5%

Balance Sheet

Cash 15.8% 15.6% 15.8% 16.0%

Accounts Receivable 23.1% 24.2% 23.7% 22.4%

Inventory 1.8% 1.6% 1.7% 1.8%

Total Current Assets 51.2% 52.1% 51.5% 50.6%

Property, Plant & Equipment 10.9% 9.2% 10.6% 11.7%

Other Non-Current Assets 38.0% 38.8% 37.9% 37.6%

Total Assets 100.0% 100.0% 100.0% 100.0%

Accounts Payable 9.2% 9.2% 9.4% 9.1%

Total Current Liabilities 32.4% 31.2% 33.1% 32.5%

Total Long Term Liabilities 25.9% 21.2% 25.0% 28.4%

Net Worth 41.8% 47.6% 41.9% 39.1%

Financial Ratios

Quick Ratio 1.23 1.29 1.21 1.21

Current Ratio 1.58 1.67 1.56 1.56

Current Liabilities to Net Worth 77.6% 65.6% 78.8% 83.2%

Current Liabilities to Inventory x18.51 x19.63 x19.22 x17.68

Total Debt to Net Worth x1.39 x1.10 x1.38 x1.56

Fixed Assets to Net Worth x0.26 x0.19 x0.25 x0.30

Days Accounts Receivable 79 90 84 73

Inventory Turnover x15.38 x15.18 x15.63 x15.35

Total Assets to Sales 94.5% 103.2% 97.6% 89.7%

Working Capital to Sales 17.8% 21.5% 18.0% 16.2%

Accounts Payable to Sales 8.7% 9.4% 9.2% 8.2%

Pre-Tax Return on Sales 5.7% 6.1% 5.5% 5.7%

Pre-Tax Return on Assets 6.1% 5.9% 5.7% 6.3%

Pre-Tax Return on Net Worth 14.5% 12.3% 13.6% 16.2%

Interest Coverage x6.05 x5.71 x5.70 x6.30

EBITDA to Sales 8.3% 8.8% 8.1% 8.2%

Capital Expenditures to Sales 2.2% 2.5% 2.0% 2.1%

Consulting Services

Acquisition multiples below are calculated using at least 11 private, middle-market (valued at less than $1 billion)

industry asset transactions completed between 8/2004 and 6/2013. Data updated annually. Last updated:

November 2013.

Valuation Multiple MVIC/Net Sales MVIC/Gross Profit MVIC/EBIT MVIC/EBITDA

Median Value 0.5 0.9 4.2 3.6

MVIC (Market Value of Invested Capital) = Also known as the selling price, the MVIC is the total consideration

paid to the seller and includes any cash, notes and/or securities that were used as a form of payment plus any

interest-bearing liabilities assumed by the buyer.

Net Sales = Annual Gross Sales, net of returns and discounts allowed, if any.

Gross Profit = Net Sales - Cost of Goods Sold

EBIT = Operating Profit

EBITDA = Operating Profit + Noncash Charges

Financial industry data provided by MicroBilt Corporation collected from 32 different data sources and represents financial performance of over 4.5 million privately held businesses and detailed industry financial benchmarks of companies in over 900 industries (SIC and NAICS). More data available by subscription or single report purchase at www.microbilt.com/firstresearch.

VALUATION MULTIPLES

SOURCE: Pratt's Stats™ (Portland, OR: Business Valuation Resources, LLC) To purchase more detailed information, please either visit or call 888-287-8258.www.BVMarketData.com

Association of Independent Consultants (Canada) Media, links, events, and FAQ.

Association of Management Consulting Firms Publishes annual operating ratios for consulting firms.

Canadian Association of Management Consultants Media, events, links, and industry resources.

Harvard Business Review Frequent articles about consultants.

Institute of Management Consultants Certifications and programs for consulting professionals.

Kennedy Consulting Research & Advisory Market intelligence for the consulting profession. Industry news and articles.

Turnaround Management Association News, publications, and links.

Vault Rankings of top 50 management consulting companies.

Industry Websites

CRM - customer relationship management

Glossary of Acronyms

ERP - enterprise resource planning

KM Systems - knowledge management systems

RFP - request for proposal

ROI - return on investment

SFA - sales force automation

Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.