Construction health calculator

WIP can look rich while cash is trapped in retainage and change orders. This calculator is for small GCs and specialty contractors who can name revenue, job costs, backlog, and how many bids they actually win.

Who this is for

Builders with jobs measured in weeks to months. A punch-list handyman may be happier in trades. A developer-flip hybrid should also look at the fix-and-flip page.

What to enter first

Revenue, COGS (direct job cost), labor, jobs, operating expenses, receivables. Bid-to-win and backlog days are the pipeline. Debt service if you carry equipment or a line.

Worked example: residential GC, eight jobs a year

Original year.

  • Billings: $2,180,000
  • Direct job costs (subs, materials):
  • Internal labor:
  • Office overhead: $215,000
  • Jobs closed: 8
  • Bids submitted: 41; bids won: 11 (some still in backlog)
  • AR including retainage: $240,000
  1. Gross margin on direct costs = (2,180,000 − 1,592,000) ÷ 2,180,000 = 27.0%. Many small residential GCs talk about mid-teens to 20% net after overhead; 27% gross can still be a 8% net after office and labor: net ≈ 2,180,000 − 1,592,000 − 186,000 − 215,000 =
  2. Bid-to-win on submitted bids = 11 ÷ 41 = 26.8%. A common conversation is 25–35%. Winning every bid often means you are the cheapest, not the best.
  3. Overhead as % of revenue = 215,000 ÷ 2,180,000 = 9.9%. Recovery depends on whether jobs were quoted with that burden in them.
  4. If AR is $240,000 on $2.18M billings, collections lag is real. A “profitable” year still needs a line of credit if retainage sits until punch list.

The next bid should not be cheaper to “keep the crew busy” if gross is already 27% and cash is in retainage. Backlog days and AR belong on the same dashboard as margin, which is why they are here.

How to read the results

Job margin is pricing vs. field cost. Cost variance is whether the estimate was real. Bid-to-win is market position. Backlog is survival. Overhead recovery is whether the office is in the bid. AR days (when you enter receivables) explain the profitable year that still panicked on Friday payroll.

Mistakes that make the math useless

  • Recognizing the full contract as revenue when 40% is still in the ground.
  • Leaving change orders unapproved in the “we will get paid” column.
  • Comparing a remodel year to a new-build year.

When to re-run the check

After a bid you won that stretches bonding or crew, and after any month where WIP looks strong and deposits do not arrive.

Cash or accrual?

Match your books. If you enter accrual revenue, enter the related costs. Mixing cash costs with accrual billings invents margin.