What is a good EBITDA margin for a small business?

Most healthy small businesses run an EBITDA margin between 10% and 20%. Service businesses and SaaS often run higher (20–35%+), while restaurants and retail typically run 10–15%. CFO Grade compares your EBITDA margin to industry-specific benchmarks across 16 sectors.

What DSCR do lenders look for?

Most SBA and commercial lenders require a Debt Service Coverage Ratio (DSCR) of at least 1.25x. Construction surety bonds often require 1.5x or higher. A DSCR below 1.0x means your EBITDA does not cover your annual debt payments.

How does CFO Grade calculate the letter grade?

CFO Grade scores 24+ financial ratios across profitability, liquidity, leverage, and efficiency — weighted by industry. The composite score maps to a letter grade from A+ to F. The full methodology and benchmark sources are described in the report and the disclaimer page.

Yes. The full analysis, 24+ ratios, letter grade, and industry benchmarks are completely free with no signup. Optional paid features include a $9 PDF export and a $19 Pro Pass with AI-generated CFO memo and 30 days of unlimited PDFs.

Do I need to create an account?

No account is required. Your numbers stay on your device unless you explicitly opt in to anonymized peer benchmarking. Pro entitlements are bound to your device with a restore link you can email yourself.

Is CFO Grade financial advice?

No. CFO Grade provides educational insights for business owners and analysts. It is not financial, tax, legal, or investment advice. Always verify the output with a qualified professional before making business decisions.

How does CFO Grade estimate what my business is worth?

Every report includes an Enterprise Value range built from your industry's typical EV/EBITDA multiple applied to your EBITDA, adjusted for size (Duff & Phelps size-discount methodology) and quality (your CFO Grade). The paid report unlocks the lender view vs. buyer view breakdown, implied equity to owners, sensitivity analysis, and full source-cited methodology. The dedicated valuation calculator lives at /valuation with industry-specific pages for 11 sectors.

Why does my business valuation change when I rerun the report?

The range moves with three things: your EBITDA (the biggest driver), your revenue size band (which sets the size discount), and your CFO Grade quality factor. When you run a second report in a later period, the Enterprise Value delta is shown prominently — 'You built $220,000 of value since Q3' or 'You lost $180,000 this quarter' — so you can watch the number that actually matters to lenders and buyers over time.

Construction & trades

DSCR, working capital, bonding — graded in one click.

Construction businesses look fine on revenue and break on cash flow. Get the numbers your bank and surety will judge you on, in seconds.

Free

Industry benchmarks

No signup

Worth quotingConstruction sureties typically require DSCR of 1.5× or higher to underwrite bonding capacity — meaningfully stricter than the 1.25× most commercial banks accept.

Built for owners and analysts who say…

"Bonding capacity is being held back and you don't know why.
"WIP and retention are eating your working capital.
"Need a quick DSCR check before applying for a credit line.

What you'll get

DSCR check tuned for construction sureties (≥ 1.5×)
Working capital and current ratio vs trade medians
Plain-English memo: what to fix before applying
PDF for your surety or banker

Common questions about construction & trades financials

What DSCR do construction lenders require?+

Most commercial banks lending to construction companies require DSCR of 1.25× minimum. Sureties underwriting bonding capacity want 1.5× or higher because of project completion risk. SBA 7(a) accepts 1.15× for construction but with stricter working-capital covenants.

What is a healthy gross margin for construction?+

Gross margin of 15–25% is healthy for most general contractors and trades. Specialty trades (mechanical, electrical) can hit 30–35%. Bidding too thin (under 12%) leaves no margin for change orders and weather risk — a common cause of construction company failures.

Why is my construction business cash-poor despite a strong backlog?+

Retention and WIP. Retention (5–10% held back per draw) ties up cash for months. WIP not yet billed compounds the problem. A backlog that looks like $2M in revenue may have only $1.4M in collectible cash for the next 6 months. Working capital and current ratio are the metrics to watch.

How does bonding capacity relate to financial health?+

Bonding capacity is typically 10–20× working capital. To grow bonding capacity, sureties want to see: working capital above $250k for small contractors, DSCR above 1.5×, current ratio above 1.5×, and 3 years of clean financials. CFO Grade scores all four.