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Key Financial Benchmarks Specially for SMB Owners

77 Business Niches • Four Industries • Five Years of Results • Focus on Six Key Metrics

Watch How They Prompt New Perspective & Insights 

Restaurants

Professional Firms

Service Businesses

Retail Businesses

 

Industry Verticals

About The Key Financial Benchmarks

  • Business Strata:G® publishes key financial performance Benchmark data in exclusive Five-Year Trend Charts for 77 individual business verticals within four industries:
    • Restaurants
    • Professional Firms
    • Service Businesses
    • Retail Businesses
       
  • The Industry Verticals featured at the Business Strata:G® site reflect the definitions and designations of the North American Industrial Classification System (NAICS).
     
  • Each of these 77 verticals has its own Benchmarks page on our site. Use the menu on the side of the page or the top menu bar under Key Financial Benchmarks to access each industry vertical.  

    The top of each Benchmarks page includes the NAICS code and the NAICS definition for that industry segment.
  • For each industry, we have identified up to six key ratios as particularly important for owners to monitor, project, and manage. 
    • Gross Margin Percent
    • Operating Expense Percent
    • Pre-Tax Profit Percent
    • Current Ratio
    • Debt-to-Worth Ratio
    • Inventory Turnover
    • GMROI (Gross Margin Return on Inventory Investment)
    • Accounts Receivable, Average Days Sales Outstanding
    • Officers, Owners Compensation Percent
       
  • As is noted on each Benchmarks page, the source data is Risk Management Association's Annual Statement Studies. As you may know, RMA collects financial statements from banks, and aggregates the findings for all industries.
     
  • RMA presents their data in 3 sections: the Top Quartile, the Middle Quartiles, the Bottom Quartile. 
     
  • Our exclusive Benchmark Trend Charts show the median value reported by RMA for each of these key ratios each year. 
     
  • We then chart the Five-Year Trends of these key ratio performance metrics for each vertical in all four industries, and make these five-year trend charts publicly-available on BusinessStrata-G.com as a complimentary service for owners and those who work with owners.

Key Financial Ratios

The Formulas • Where to Find the Numbers • What Each Ratio Tells You

 

Ratio How to Calculate Your Key Financial Ratios Where to Find the Information What the Ratios Tell
Current Ratio Current Assets divided by Current Liabilities Your balance sheet Tests for solvency or ability to meet current debt obligations. Measures how well you can cover current liabilities with liquid assets.  (Higher is better; 2.0 is average.)
Quick Ratio Cash + Accounts Receivable divided by Current Liabilities Your balance sheet

Tests the degree of solvency most strictly, using only the most liquid current assets. 

(Higher is better; 0.5 is average.)
Debt-to-Worth Ratio Total Liabilities divided by Total Owner's Equity Your balance sheet

Compares what the company "owes" creditors to what it "owns." Measures the financial strength of the business.

(Lower is better; 1.0 is average.)
Inventory Turnover COGS (Cost of Goods Sold) divided by Average Inventory @Cost COGS are recorded on your income statement; Inventory is found on your balance sheet.

Measures how often, at present rate of sales, your entire inventory is completely sold and replaced during a given year. Measures inventory "velocity." 

(Higher is better; average depends on industry.)
Gross Margin % Gross Profit $ divided by Net Sales Your income statement (P&L) Indicates percentage of sales dollars remaining after costs related to purchasing merchandise are recognized.
Profit Before Taxes % Profit Before Taxes divided by Net Sales Your income statement (P&L)

Indicates percentage of sales dollars remaining after all costs (except taxes) are recognized.

(Higher is better; average depends on industry.)
Return on Assets (ROA) Profit Before Taxes divided by Net Assets Your income statement and balance sheet

Indicates pretax return on assets; measures productivity of assets. 

(Higher is better; average depends on industry.)
Gross Margin Return on Inventory (GMROI)  Gross Margin $ divided by Average Inventory @Cost Gross Margin - your income statement
Inventory @ Cost - your balance sheet.		 Measures the gross margin returned for each dollar invested in inventory. (Higher is better; average depends on industry.)