What Manufacturing Chief Financial Officers Have to Say
April 21, 2010
On March 22 Thorugh April 5, 2010, Grant Thornton LLP Conducted a Survey Among Chief Financial Officers. 496 U.S. CFOs and Senior Comptrollers were Surveyed. Among this Large Group, 92 Officers were from Manufacturing Companies. See What These Manufacturing Chief Financial Officers Had to Say
See what questions were presented to 92 manufacturing chief financial officers and how they responded.
1. Your company is:
Item
Count
Percent %
Public
49
53.26%
Private
43
46.74%
2. The revenue size of your company is:
Item
Count
Percent %
Between $1 billion to $5 billion
28
30.77%
Between $100 million and $500 million
25
27.47%
Greater than $5 billion
20
21.98%
Between $500 million and $1 billion
13
14.29%
Less than $100 million
5
5.49%
3. The state in which you are headquartered:
Item
Count
Percent %
Item
Count
Percent %
Michigan
9
9.89%
Kansas
2
2.20%
New Jersey
8
8.79%
Maryland
2
2.20%
California
7
7.69%
Massachusetts
2
2.20%
Texas
7
7.69%
Minnesota
2
2.20%
Ohio
6
6.59%
Missouri
2
2.20%
Florida
5
5.49%
Wisconsin
2
2.20%
North Carolina
5
5.49%
Arizona
1
1.10%
Georgia
4
4.40%
Idaho
1
1.10%
Indiana
4
4.40%
Kentucky
1
1.10%
Illinois
3
3.30%
Nebraska
1
1.10%
New York
3
3.30%
Rhode Island
1
1.10%
Oregon
3
3.30%
South Carolina
1
1.10%
Pennsylvania
3
3.30%
Tennessee
1
1.10%
Connecticut
2
2.20%
Washington
1
1.10%
Iowa
2
2.20%
4. Over the next six months, do you expect the U.S. economy to:
Item
Count
Percent %
Improve
43
46.74%
Remain the same
43
46.74%
Worsen
6
6.52%
5. Over the next six months, do you expect your company’s financial prospects to:
Item
Count
Percent %
Improve
55
59.78%
Remain the same
33
35.87%
Worsen
4
4.35%
6. Over the next six months, do you expect prices or fees charged by your company to:
Item
Count
Percent %
Improve
54
59.34%
Remain the same
31
34.07%
Worsen
6
6.59%
7. Over the next six months, do you expect your headcount to:
Item
Count
Percent %
Improve
46
50.00%
Remain the same
23
25.00%
Worsen
23
25.00%
8. When do you believe the U.S. economy will come out of recession?
Item
Count
Percent %
2011
46
50.00%
Second half of 2010
24
26.09%
Later than 2011
17
18.48%
First half of 2010
5
5.43%
9. The best way to create jobs is:
Item
Count
Percent %
Cut corporate tax rate
34
40.00%
Cut personal income tax rates
26
30.59%
Tax credit for new hires
14
16.47%
Government stimulus programs
8
9.41%
R&D credits
3
3.53%
10. Is your company reducing average costs per employee in any of these employee benefit and compensation areas?
Item
Decrease
Same
Increase
Total
Salary raises
27.2% 25
55.4% 51
17.4% 16
92
Bonuses
38.0% 35
50.0% 46
12.0% 11
92
Stock options/equity based compensation
32.6% 28
66.3% 57
1.2% 1
86
401 (k) match
22.8% 21
73.9% 68
3.3% 3
92
Health care benefits
26.4% 24
68.1% 62
5.5% 5
91
Life insurance benefits
7.7% 7
90.1% 82
2.2% 2
91
Disability benefits
7.7% 7
91.2% 83
1.1% 1
91
Average %
23.1%
70.7%
6.1%
635.0
11. About which type(s) of pricing pressure are you most concerned? (You may select more than one.)
Item
Count
Percent %
Raw materials (e.g., food, metals)
62
70.45%
Employee benefits (e.g., health care, pensions)
49
55.68%
Energy
28
31.82%
Insurance
9
10.23%
Other
4
4.55%
12. Are you having difficulties accessing credit in general?
Item
Count
Percent %
No
71
80.68%
Yes
17
19.32%
13. Compared to this time last year are you more or less worried about your organization.
Item
Count
Percent %
Less Worried
49
55.68%
About the same
33
37.50%
More worried
6
6.82%
14. The FASB and IASB will be shortly releasing an exposure draft regarding revenue recognition. The objective is to clarify the principles for recognizing revenue and to create a joint revenue recognition standard for US GAAP and IFRSs that companies can apply consistently across various industries and transactions. Are you aware of this project?
Item
Count
Percent %
No
60
68.18%
Yes
28
31.82%
15. Do you believe financial statements are too complex to be useable by the average investor?
Item
Count
Percent %
No
52
60.47%
Yes
34
39.53%
16. Does your company currently provide nonfinancial measures (Key Performance Indicators) about your organization in its financial statements?
Item
Count
Percent %
No
42
50.60%
Yes
41
49.40%
17. Who do you view as the primary users of your financial statements?
Item
Count
Percent %
Current shareholders
28
33.73%
Creditors
16
19.28%
Management
13
15.66%
Current owners of equity interests
6
7.23%
Potential shareholders
5
6.02%
Regulatory agencies
5
6.02%
Research (sell side) analysts
5
6.02%
Rating agencies
3
3.61%
Other
1
1.20%
Potential owners of equity interests
1
1.20%
18. Does your firm prepare financial statements according to International Financial Reporting Standards (IFRS)?
Item
Count
Percent %
No
63
75.90%
Yes
20
24.10%
19. Do you support a move to IFRS?
Item
Count
Percent %
Yes
44
53.01%
No, would like to continue using GAAP
39
46.99%
20. Ideally, who should set U.S. accounting standards for companies that file with the SEC?
Item
Count
Percent %
A national independent board supervised by a national regulator (e.g. the Financial Accounting Standards Board)
44
56.41%
An international independent board supervised by international entities such as the International Organization of Securities Regulators (e.g. the International Accounting Standards Board)
22
28.21%
A national regulator (e.g the Securities and Exchange Commission)
9
11.54%
The global accounting profession (e.g. the International Federation of Accountants)
2
2.56%
A body designated by an international entity such as the Organization for Economic Cooperation and Development, the United Nations Council on Trade and Development or the World Trade Organization
1
1.28%
21. During 2010 and 2011, the FASB and the IASB plan to issue standards that will include major revisions to the current accounting for revenue recognition, financial instruments, leases, financial statement presentation, insurance contracts, and the conceptual framework. How should these standards be implemented in the US?
Item
Count
Percent %
Using an incremental approach where no more than one major standard takes effect in a given reporting year to allow time for preparers and users to understand and implement the changes.
28
35.90%
The standards should be implemented first in IFRS; US companies can make the transition on adoption of IFRS
20
25.64%
The Boards are moving too quickly to implement major changes and should defer major changes in the financial reporting model until the projects have been more fully developed and discussed.
16
20.51%
Using a "big bang" approach where all of the standards are effective for the same reporting period to improve the financial reporting model as quickly as possible.
14
17.95%
22. Should there be different recognition and measurements principles for public entities and nonpublic entities?
Item
Count
Percent %
No
44
58.97%
Yes
22
28.21%
Don't know
10
12.82%
23. Should nonpublic entities be allowed to use simpler recognition and measurement principles when preparing financial statements?
Item
Count
Percent %
No
37
47.44%
Yes
35
44.87%
Don't know
6
7.69%
24. In the coming year, do you believe your aggregate state effective tax rate will:
Item
Count
Percent %
Increase
47
61.84%
Remain the same
26
28.95%
Don't know/not applicable
2
7.89%
Decrease
1
1.32%
25. With regard to international taxation, you are most concerned about:
Item
Count
Percent %
Transfer pricing
27
35.53%
Overall global compliance burden
19
25.00%
Repatriation of offshore earnings
18
23.68%
Risk management in developing countries
10
13.16%
Mergers and acquisitions
2
2.63%
26. Is your company currently taking any actions in anticipation that federal tax rates will change?
Item
Count
Percent %
No
53
70.67%
Yes
22
29.33%
27. What types of actions? (Check all that apply)
Item
Count
Percent %
Reorganization of business structure
20
51.28%
Acquisition of capital assets
9
23.08%
Acceleration of dividend payments
8
20.51%
Other (please use text box below to describe)
8
20.51%
Disposition of capital assets
7
17.95%
Modification of terms on installment sale(s)
4
10.26%
28. Does your company plan on taking any action in anticipation of the current administration's international tax proposals?
Item
Count
Percent %
No
50
67.57%
Yes
24
32.43%
29. What types of decisions or actions? (Check all that apply)
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