All large financial datasets have multiple problems such as data entry errors (e.g., negative amounts of assets and liabilities) or totals of assets, liabilities and equity not adding up. To deal with these data problems, IndustriusCFO has developed a cleaning routine that includes over two hundred checkpoints applied to each financial statement. Rather than using list-wise deletion and removing problematic statements altogether, which would reduce the representativeness of the data, the IndustriusCFO procedure imputes the problematic or missing values using complex formulas of weighted averages. The components and weights included in the calculations vary depending on the availability and quality of the relevant data.

Datasets are updated annually, and in some cases biannually. After the last, full year-end financial data has been collected and treated, our dataset is updated.

The “Industry Metrics One Year” report uses only the last available financial year of data available. It is ideal as company-size trend comparative, as it displays industry trends for Small, Medium, and Large company sizes. Trends from the smallest 25% of companies (based on Net Sales) will appear in the “Small” column, medium 50% of companies appear in the “Medium” column, and the largest 25% of companies appear in the “Large” column. You’ll also find an “All” company aggregate column. This report is ideal for comparing trends between different company sizes. A “Industry Metrics Four Years” report will use the last four years of financial data available, with each column containing trends over each of the last four years respectively. This report also contains a “Cash Flow” analysis showing trends between each of the last four years. This report is ideal as a longitudinal analysis of trends occurring in your industry of interest through time.

While both 4-digit SIC and 6-digit NAICS codes are the most specific groups within their respective industry classification systems, our database allows for more specific segmentation analysis in some cases. If you are interested in having us perform such an analysis, please contact us at info@www.industriuscfo.com.

Our system allows benchmarking analysis with as little as 7 companies. However, given that statistical significance occurs with a sample size of around 30, we recommend that you have at least 30 companies before proceeding with your analysis. If your Regional restrictions limits your sample size to too few, alter your selections to be more broad and select Recalculate.

We recommend starting with the “Business Performance Scorecard” to perform a comprehensive analysis of your company’s performance across Liquidity, Asset Efficiency and Profitability perspectives. There are a total of 15 Key Performance Indicators (KPI’s) in this report, each containing 6 points of data, 1 from your company and 5 from the Industry’s Bottom 10%, 25%, Top 50%, 25% & 10%, respectively. This level of benchmarking data will enable you to understand exactly how far away your performance is from your peers at the median and respective distribution points. You could quickly understand where certain strengths and weaknesses exist in your financial performance, noting the concise verbal descriptions conveying how your company is performing on any metric and how you compare to industry peers.

This analysis also contains a “Common Size” analysis, whereby you could also compare your company’s itemized Income Statement and Balance Sheet trends with your industry peers held at the exact same size as the company analyzed. View data in “%” or “$” and in “Table” or “Chart” views.

When determining your weaknesses, you could proceed to model “what-if” scenarios using the Liquidity (which also includes Asset Efficiency measures), Profitability and Growth analyses from the Report List. This analysis also contains a “Common Size” analysis, whereby you could also compare your company’s itemized Income Statement and Balance Sheet trends with your industry peers held at the exact same size as the company analyzed. View data in “%” or “$” and in “Table” or “Chart” views.

Another important analysis to perform also helping identify financial strengths & weaknesses is the Business Risk and Loan Risk analyses.

The Business Risk and Loan Risk modules will analyze your company’s financial performance from both a Profitability and Liquidity perspective at the same time, giving you an overall Pass/Fail at the top of the report.

Net Balance Position (NBP) is a stringent measure of Cash Liquidity, and goes beyond what traditional liquidity ratios can detect (like the Quick & Current Ratios). NBP goes beyond looking at clusters of the Balance Sheet, like Current Assets and Current Liabilities, and teases apart the Balance Sheet to account for the finer components of these account clusters.

For example, if Company A has $100k in Cash, and $400k in Accounts Receivable (AR), while Company B has $250k in Cash and $250k in AR, the Quick & Current Ratios will view these two companies as performing equally, if all other aspects of the companies are the same. In fact, Company B has far more Cash on hand, while appearing to carry less AR, a sign that Company B is collecting faster than Company A.

NBP seeks to understand the relationship between Working Capital Available and Working Capital Required, in the following way:

You could see how NBP requires the company to account for their AR & Inventory accounts as a Working Capital Need. IndustriusCFO also analyzes same-size industry peers, to determine the ideal amount of Cash your company should keep on hand.

Note: Your company may have a large amount of Assets within the AR and Inventory accounts, but if taking longer than 30-days to collect from your clients (Collection Period) or taking too long to turn your Inventory (Inventory Turns or Days), while Liabilities are due every 30-days, you risk a Cash Flow issue, that NBP helps you detect far more reliably than any traditional Liquidity measure.