The Value of Business Benchmarking

Business Benchmarking is the process of continually comparing and measuring performance against similar companies in the same industry with the goal of improving performance.  The process reveals and quantifies areas of strength and weakness, and enables companies to take proactive steps toward improvement.

WHY DO WE USE THE RMA® DATABASE IN BIZBENCH?
 
Simply put, it's the best available for the purpose of responsible financial benchmarking.
 
Comparing your clients' performance to a database standard is a serious matter. Before recommending changes based on the benchmarking comparison, you should always know the:
  • Time frame covered by the database
  • Sales range against which your clients will be compared  
  • Sample size against which your clients will be compared  
Data on all statements in the RMA database must conform with Moody's KMV Risk Analyst software's account title definitions or it is discarded. This guarantees standardization of all data in the database.  The data is examined repeatedly for validation before being published in the database.
 
Why trust your clients' comparisons to any database other than the most transparent and respected source for 90 years?
 

We want to make sure you can use benchmarking to its full potential, please see the following articles for more information.

 

 

BizBench as a Business Benchmarking Tool

The first step in business benchmarking is to determine where a company "stands" in terms of its performance.  BizBench is a valuable tool for business benchmarking because the software performs comparative ratio analysis, using company financials to benchmark about 50 key ratios.  BizBench automatically calculates industry percentile rankings for these ratios.

Because the specific financial characteristics of firms are strongly dependent upon industry and size, BizBench creates an "apples to apples" comparison between a company and similar-sized firms in the very same industry (same NAICS code).  Over 735 industries can be benchmarked with BizBench.  To see how this powerful, yet simple, analysis works, download a free sample report , or sign up for our next free demo session.

The industry financial ratio data for the comparisons is from the Annual Statement Studies® 2009-2010 of Risk Management Associates (RMA®) long recognized as leaders in industry benchmarking data for ratio analysis.  BizBench was developed under a licensing agreement with RMA®.

To get started with business benchmarking, or to upgrade your current benchmarking process more efficient, order BizBench risk-free today.

More About Business Benchmarking

If you would like to read more about business benchmarking, we recommend the following books: