Housing Giants - July 10, 2008 - (Page 30)

f e at u r e “The data is extremely important in times like this, and in good times it’s more for your own interest than value of planning.” – Don Wick, executive vice president, Rockford Homes “We have a team deal where everyone is just searching for the news that is pertinent. We’ll usually just pass that around through the management team. You’ll see the articles being sent through the mail system, and they just hit everyone’s desk,” Cave says. LOOkING AHeAd ANd wATcHING THe bALANce SHeeT In today’s market, many builders are faced with the tough decision of selling off their land at a loss or holding on for a market uptick. Doug Wilson, a consultant with Next Solutions, says that home builders should take a close look at their balance sheets, financial ratios and local markets to determine the best way to handle their losses. To keep the organization in place and ready for the upturn, Wilson says that sometimes means purging overpriced land from the balance sheet. Often, the best way to sell lots is to build them out, even if that means taking a loss. “Don’t be afraid to build for no or low profit on your homes. Purging your balance sheet may be more important than your gross margin right now. The key mantra now isn’t to make money, it’s to survive,” says Wilson. Glenn Gleason, senior vice president of process excellence at Dewey Homes in Pennsylvania, says that home builders should be paying close attention to their return on invested capital. Watching overall profit margins and returns per region, per community and per employee can help home builders isolate areas for improvement and increased productivity. 30 HOUSING GIANTS.7.10.08 www.HOUSINGGIANTS.cOm http://www.deweyhomes.com/ http://www.nextsolutions.us/ http://www.housingzone.com/giants/article/CA463342.html?q=roic http://www.housingzone.com/giants/article/CA468057.html?q="balancesheet: http://www.housinggiants.com

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Housing Giants - July 10, 2008 Contents Viewpoint News & Moves Tech M&A Critical Management Series Part 1

Housing Giants - July 10, 2008

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