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Printed Wiring Board Industry Profile: Part 1 - 3 Financial Analysis of Industry

Printed wiring board manufacturing is a highly competitive global industry. Although PWBs are not a commodity item, many of the competitive pressures and sourcing patterns are typical of a commodity market.

A. Profitability

Profitability in the industry varies from year to year, but generally falls in the range from 0 to 3%. Extremely stiff foreign competition and adequate global capacity keep the profit range narrow. The net profit after taxes for the domestic PWB industry in 1992 was 1.6%, and in 1993 was 2.9%. While these trends vary annually, in general the largest companies outperform the smallest in terms of profitability, while the mid-size companies fluctuate more between extremes. The reasons for this trend are not entirely clear, but as PWB manufacturing becomes more expensive and capital-intensive, the largest companies may benefit from greater resources and economies of scale.

B. Operating and Financial Ratios

With respect to operating and financial ratios, the following is a summary of typical figures for the industry:

  • Pre-tax return on assets: 3% to 5%
  • Net sales per employee: $60,000 to $110,000

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