Interest Cover Benchmark Calculation
How it’s Calculated Total Net Profit (before owners’ salaries & remuneration) = _____________________________________ Total Interest expense How it’s Used Higher results show that the business is highly capable of servicing its interest expenses. Interest cost is often not reported on its own – it also includes Bank and Credit Card charges. As a result, […]
Instant asset write-off for small businesses
In case you didn’t know there’s a $30,000 instant asset write-off for small businesses If businesses are wanting to purchase assets, now may be the time given recent changes to the instant asset write-off (IAWO) thresholds. The IAWO was first introduced in 2015 as a means to help small businesses through a period of economic […]
Growth Capacity Benchmark Calculation
How it’s Calculated Growth Capacity calculation: $ of Net Profit – ($ of Current assets – $ of Current liabilities) = ______________________________________ x 100 Turnover How it’s Used This ratio shows […]
Using Business Benchmarks – Three Points for Advisors
One point that can be made about ‘Business Benchmarks’ is that they are a tool. They are not the ‘complete answer’ to every possible question a client might ask you. It’s not the one tool that will fix absolutely every problem that you are going to run across. But they will enable you as an […]
Discover the Feedback Loop Secret
Feedback loops are seen everywhere, from biological systems where they are used to achieve a stable environment to sports where performance is measured and used to make enhancements. No matter the application, the process is simple: production occurs, measurements are taken and the information is used to make improvements. The surprising thing is that despite […]
Give me the numbers… now give me the significance of the numbers
The Italian mathematician Luca Pacioli was the first to publish the Venetian method of bookkeeping over 500 years ago, and this has been the primary source of modern accounting ever since. You can see the relevance of his work by looking at some of the accounting terms and principles still used today, which include: double […]
Net Profit Benchmark Calculation
How it’s calculated Net Profit can be calculated before owner’s salary (bos) is removed or after owner’s salary (aos) is removed. Net Profit (bos) calculated as: Total Income – Expenses (excluding Owner’s Wages and Superannuation) Net Profit (aos) is calculated as: Total Income – Expenses – Owner’s Wages – Owner’s Superannuation How It’s […]
Net Profit per Owner Benchmark Calculation
How it’s calculated Net Profit per Owner can be calculated before owner’s salary (bos) is removed or after owner’s salary (aos) is removed. Net Profit (bos) per Owner is calculated as: Net Profit (bos) / Full Time Equivalent (FTE) Owners Net Profit (aos) per Owner is calculated as: Net Profit (aos) / Full […]