Breaking Down The PIA Ratios –Dickeson

Each year in our printing industry we go through a little ritual akin to the rites of spring. It’s called the PIA Ratios Studies. Printing Industries of America collects General Ledger Accounting Data from the prior calendar year from printing firms as a “survey.” PIA commissions the H.R. Margolis Co. (Certified Public Accountants) to compile and analyze the data submitted, and then prepare reports for publication. For 2001, some 900 printers submitted their results in the “survey.”

Survey firms reporting the top 25 percent of “Net Profits” are called the “Profit Leaders.” Ronnie H. Davis Ph.D, chief economist of PIA, calls the remaining 75 percent the “Profit Challengers.” In the February issue of this journal, Davis reports that the “Net Profits” of the Challengers were but six tenths of a percent of their sales.

As part of our rites of spring, we roll out the ashes and sack cloth and cry “Woe, Woe, Woe, is unto us! Have pity on our printing industry that sits on the doorstep reading Chapter X of the “Book of Bankruptcy.”

Late Show Bits

Wait a damn minute, Horace. Last numbers I saw there were 45,000 printers in this country. We’re somewhere in Dave Letterman’s top five of American industries. Every year, year-after-year, we see those same dismal results. And, “We’re Still Here” as the song goes. What’s the real story, Mr. Davis?

For starters, these PIA numbers are “survey” data, not random sample results. Does that make a difference? Of course it does. We can’t say that these results are “representative” of the 45,000-printer universe. Nine hundred printers, if randomly chosen, would provide a valid random statistic, but 900 volunteers do not. They’re 900 companies willing to open their kimonos—sorta.

Secondly, we’re talking “Net Profits” here. If you believe Net Profits mean something, please reveal all to me. Since Enron, Global Crossing and even before those disasters, net profits were a fantasy.

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