![]() ![]() Benchmark.Īn investment benchmark is a standard against which the performance of an individual security or group of securities is measured.įor example, the average annual performance of a class of securities over time is a benchmark against which current performance of members of that class and the class itself is measured. Copyright © 2003 by Houghton Mifflin Company. You must be ready to confidently and credibly address any concerns your banker may have.Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. The bank will do its own review of your ratios to spot any negative trends or underperformance versus industry averages. For instance, you may have to keep your equity above a certain percentage of your debt or your current assets above a certain percentage of your current liabilities. Why are benchmarks important to bankers?īankers will often make financial ratios part of your loan agreement. It lists 50 performance indicators for 199 industries in all of North America (Canada, U.S., and Mexico). Wolters Kluwer publishes the Almanac of Business and Industrial Financial Ratios. ![]() It provides 14 key business ratios, including solvency ratios, efficiency ratios and profitability ratios for over 800 types of businesses arranged by industry categories. RMA provides balance sheet and income statement data, and financial ratios compiled from financial statements of more than 240,000 commercial borrowers, classified into three income brackets in over 730 different industry categories.ĭun & Bradstreet’s Key Business Ratios provides online access to benchmarking data. Banks use this data as a standard to evaluate businesses applying for financing. They can also increasingly be found online, where they can be purchased.Īnnual Statement Studies is published by the Risk Management Association (RMA). Most of these are available at university and larger municipal libraries. While many of these sources are U.S.-based, all provide valuable insight into how well your business is performing in comparison to industry standards. You can use these to compare your business's operating results with those of competitors, and to identify your business's strengths and weaknesses relative to its industry. There are many other established sources listing the industry standards for financial ratios. You can also consult your local Board of Trade or Chamber of Commerce for ratio values specific to your geographical area, or the industry association for ratio values specific to your industry sector. Information on specific financial ratios is also available through Statistic Canada’s Quarterly Survey of Financial Statistics. This data can be search using keywords or specific NAICS codes. Statistics Canada maintains a very thorough library of financial performance data relevant to the Canadian economy, including current ratio values for most industry sectors. Where can I find Canadian ratios and benchmark data? Your information will be kept strictly confidential. This free online tool will allow you to compare your productivity levels to those of other companies in your sector. You can also try BDC’s workforce efficiency benchmarking tool to take a first step at benchmarking your business. Your first source for where to start should be your banker, who can tell you what ratio values are used by the bank. Where do I find financial ratio benchmarks for my industry? Once you know where your business stands, you can start improving and reaping the benefits on your bottom line. They indicate information, such as whether you have accumulated too much debt, have stockpiled too much inventory, or are not collecting receivables quickly enough. A warehousing business could follow costs per square foot.īut no matter what kind of business you run, financial ratios are a simple and effective way to get a snapshot of how you’re doing in terms of productivity, cost control and other areas. ![]() For example, a restaurant might track revenues per table. Some measures are more general, such as sales per employee or productivity per hours worked. Growth & Transition Capital financing solutionsīenchmarking involves choosing performance measures you can use to compare yourself against other companies.įinancial ratios are just one of many benchmarks you can use. Kauffman Fellows Program Partial Scholarship ![]() Venture Capital Catalyst Initiative (VCCI) Industrial, Clean and Energy Technology (ICE) Venture Fund ![]()
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |