Spring 2010 issue of Horizons

Raise Your Expectations CERTIFIED PUBLIC ACCOUNTANTS AND BUSINESS CONSULTANTS

• It provides consistency for home builder financial reporting. • It is available for free on the NAHB website.

WHY USE THE NAHB CHART OF ACCOUNTS?

The NAHB chart of accounts was established in the 1970s. Several revisions have been made to address current trends. The Home Builders Services Group at RubinBrown has been an active contributor to these changes. There are several benefits of using the chart of accounts, which is available on many home builders’ software packages: • It is grouped in the manner home builders do business. • It serves as the basis for the NAHB Cost of Doing Business Studies.

BENCHMARK NUMBERS

According to the NAHB Cost of Doing Business Study for 2009, published in January 2010, the industry recorded a loss in 2008. Our market did not fare as well, as noted by the 2009 RubinBrown Home Builder Statistical Analysis:

NAHB Cost of Doing Business Study Type of Builder

RubinBrown

Home Builder Statistics

Small Volume

Production

National

100.0%

100.0%

100.0%

100.0%

Sales Percentage

Costs of Construction

24.3%

18.3%

16.5%

23.3%

Developed lot costs

61.1%

63.0%

64.3%

61.5%

Direct construction costs

4.6%

3.6%

4.9%

5.8%

Indirect construction costs

90.0%

84.9%

85.7%

90.6%

Total Costs of Construction

10.0%

15.1%

14.3%

9.4%

Gross Profit

Operating Expenses

5.3%

3.1%

2.8%

3.3%

Financial Costs

6.9%

6.7%

5.4%

4.3%

Selling Expenses

12.2%

9.8%

8.2%

7.6%

Total Expenses

Income (Loss) Before G & A Expenses and Income Taxes

(2.2)%

5.3%

6.1%

1.8%

5.0%

9.0%

9.2%

8.2%

General and Administrative Expenses

(7.2)%

(3.7)%

(3.1)%

(6.4)%

Net Income (Loss Before Income Taxes)

30 u spring 2010 issue