Capacity, margin, leverage — a 60-second financial health check.
Manufacturing lives on thin margins and heavy assets. Get a quick read on whether you're earning your cost of capital — with industry-specific benchmarks.
Worth quotingUS manufacturers with Debt/EBITDA above 3.5× face borrowing costs roughly 200–300 bps higher than peers under 3× — leverage discipline directly shapes cost of capital.
Built for owners and analysts who say…
- "Margins look fine on paper but cash never seems to grow.
- "Inventory and WIP are eating all the working capital.
- "Need a DSCR check before refinancing the equipment loan.
What you'll get
- Manufacturing-specific margins and inventory turn
- DSCR and Debt / EBITDA for capex lenders
- Plain-English memo of what to fix next quarter
- PDF for your banker or board
People also ask
Common questions about manufacturing financials
What is a healthy gross margin for manufacturing?+
Healthy gross margin is 20–35% for most manufacturers. Custom and specialty manufacturing can hit 35–45%. Commodity production runs 12–18%. Below 15% leaves no buffer for input-cost shocks and is a common cause of cyclical failures.
What inventory turn should manufacturers target?+
4–8 turns per year is healthy for most discrete manufacturers. Continuous process (food, chemicals) can hit 10–15. Below 3 turns typically signals slow-moving inventory, forecast issues, or production-pull mismatches. Each extra turn is real cash freed up.
How do banks evaluate manufacturing businesses?+
Banks focus on DSCR (1.25× target), Debt/EBITDA (under 3.0× preferred), gross margin trend, and inventory turn. Equipment loans are secured by collateral but the cash flow test still applies. ABL (asset-based lending) often comes into play above $5M in revenue.
Why is my P&L profitable but I can't cover payroll?+
Working capital trapped in inventory and AR. Manufacturing recognizes COGS when goods are sold, but cash was spent months earlier on raw materials and labor. If you can't make payroll, the diagnosis is almost always cash conversion cycle, not profitability.