Input Help

Business Performance Analysis

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Help for the Business Performance Analysis Input Module.

This Module provides the input values applied in Analysis Modules.

This is where you input your data. Instructions for each item are provided below. The ? after an item links directly to the items Help.




Current performance inputs are based on the current full year performance of the business. Broad expense categories are provided to determine the level of expenses that vary with sales (Variable Expenses) and those that don't (Fixed Expenses). A recent business taxation return will assist in determining current inputs. If required they can be adjusted to best reflect current trading.

Input for Relative Indicators should be based on your subjective views. These are translated into quantifiable values for module operation. There is no need to provide "perfect" answers. Use industry knowledge to make informed estimates. The goal is to provide a streamline tool to indicate possible outcomes. Inputs do not have to be perfect but should reasonably reflect current business operation.




These are Module specific Controls. They appear as click-able links below the Analysis Menu.




This Control hides the Current performance inputs.

It is a toggle between Compress and Expand.




This Control shows the Current performance inputs.

It is a toggle between Expand and Compress.




This Control allows the decimal precision (number of decimal places) of the values to be adjusted. To adjust the decimal precision click Format. You will then be prompted to enter a new decimal precision number. Then click Format Confirm.




This Control prints the current window.

You can also use the browsers Print and Print Preview functions to set print variables. To do this from your browser tool bar go File, Print or File, Print Preview.




This is an identifier for the currently displayed Analysis data. The default name is Example Business. To save data for a New Business click Save with the default Example Business selected. You will then be prompted to enter a new Business Name. Input a name for the Business and then click Save Confirm. When saved the name will appear in the drop down list and the saved data can be recalled.




This is a click-able Control, it saves your input data as a cookie on your computer. To save data for a New Business click Save with the default name Example Business selected. You will then be prompted to enter a new business name. Select an existing Business Name to Save using the existing name. You cannot Save or Delete data for the Example Business.




This is a click-able Control, it loads previously saved data from a cookie on your computer. To load business data select the required Business Name and click Load.




This is a click-able Control, it deletes a cookie on your computer containing previously saved data. To delete business data select the required Business Name and click Delete.




This is a click-able Control, it exports your input data to an xml file format that can be saved as a local file on your computer. To export business data select the required Business Name and click Export. The exported data is encoded into in an xml format and displayed in a TextArea. Select All of the TextArea contents, right click the TextArea and Copy. Open a text editor (ie notepad), Paste the copied data to a new file and Save As an xml file (*.xml). Use a descriptive file name (ie jimsbusiness.xml) so you can identify the data set saved.




This is a click-able Control, it imports your input data from a previously saved xml file format on your computer. To import business data click Import, then Browse to locate and select the required previously saved .xml file. Click Import Confirm to import the xml data.

This control is only functional with a current Subscription.




Input the Revenue generated by the business for the current year.




Current expense inputs.




This is a click-able Control. This allows you to input your Expenses directly in Monetary values (Dollars, Pounds etc). It functions as a toggle control with the Percent control. The default setting is Monetary.




This is a click-able Control. This allows you to input your Expenses as a Percentage of Annual Revenue. It functions as a toggle control with the Monetary control. The default setting is Monetary.




Variable Expenses vary with the volume of product or service you provide. Only include these costs in this section and allocate them into one of the five categories.




Input the annual variable expense for materials and supplies directly related to producing your product or providing your service.




Input the annual variable expense for labor directly related to producing your product or providing your service. This should include the annual value of any labor provided by the owner that is directly related to producing your product or providing your service. Any owner labor value should reflect the effective labor effort and can be estimated as the cost of an employee who could replace the owners efforts related to producing your product or providing your service. Labor expenses should include all associated on-costs and benefits.

Do not included fixed labor expenses in this value.




Input the annual variable expense for distribution of your product or service. This may include freight costs, packaging, and vehicle running costs.




Input the annual variable expense for marketing. Include advertising, promotional publications, sponsorships, client functions, and any marketing or sales expense. Marketing is not essentially a variable expense, however it is assumed that marketing does influence the level of sales and a relationship exists between the level of marketing and the level of sales. It is on this basis that it forms a component of Variable Costs.




Input any annual variable expenses not already accounted for.




This is the sum of the variable expenses. It is expressed as a monetary value and as a percentage of Annual Revenue.




Fixed Expenses remain constant (up to a point) while the volume of sales vary. Only include these costs in this section and allocate them into one of the five categories.




Input the annual fixed location expense. Include rent, power and light, maintenance, building insurance, security, and cleaning.

For a business Valuation if the business owns the property then include the current market rental/lease rate for the property ie what it would cost to lease the property for a year. Do not include purchase or finance costs.




Input the annual fixed expense for labor. This should include any labor expense not already accounted for in variable costs. This should include the annual value of any labor provided by the owner that has not already been accounted for in variable costs. Any owner labor value should reflect the effective labor effort and can be estimated as the cost of an employee who could replace the owners efforts. Labor expenses should include all associated on-costs and benefits.




Input the annual fixed administration expense. Include office phone, equipment costs, and stationary.




Input the annual fixed Interest Cost. Consider only operational finance ie working capital and overdrafts. Include only the interest component of loan repayments. Principle components reflect assets.

Do not include interest related to property finance for which current market rental/lease rates have been included in Location Expenses.

If you are undertaking a Business Valuation it is recommended that you do not include interest related to the business purchase. Initially the business should be valued with 100% equity. This ensures the valuation provides the required return on the Total Investment. Once you have established valuation details you can then add purchase finance interest costs to determine the impact on the business.




Input any annual fixed expenses not already accounted for.




This is the sum of the fixed expenses. It is expressed as a monetary value and as a percentage of Annual Revenue.




This is the sum of the variable and fixed expenses. It is expressed as a monetary value and as a percentage of Annual Revenue.




This is Annual Revenue less Total Expenses. Profit/Surplus reflects the before tax operating profit/loss of the business for the full years trading. It represents the day to day (short term) business performance. Asset investment including property, plant and equipment are not considered.




Annual replacement costs for business assets are calculated as the replacement value of Business Assets divided by the Life of Assets. This provides for constant reinvestment to maintain the business.




Input the replacement value of physical Business Assets. Exclude property. Consider vehicles, plant and equipment.




Input the average life of the assets. The replacement value of Business Assets will be divided by the Life of Assets to provide an indication of annual asset Depreciation Allowance.




Relative Indicators are applied to quantify factors that influence future business performance. Relative Indicators for each year are applied to reflect the percentage expected change in the unit cost or strength of the factor. Each indicator is relative to the prior year. If there is no change from the previous year the Relative Indicator is 0. A 10% increase from the previous year is reflected by a relative indicator of 10. A 10% decrease from the previous year is reflected by a relative indicator of -10. Relative indicators for costs reflect changes in the base unit of the expense such as labor costs per hour or material costs per unit.

Relative Indicators are required for each factor for each of the Forecast Years. If there is no change from the previous year the Relative Indicator is 0. If there is a change input the positive or negative percentage change. Revenue and Expense inputs are used with the Relative Indicators to calculate forecast values.

The default value for Relative Indicators is 0, indicating no change year on year.




This Control allows the number of Forecast Years to be adjusted. To adjust the number Forecast Years click Forecast Years. You will then be prompted to enter a new Forecast Years number. Then click Forecast Years Confirm.

As the number of forecast years is increased the reliability of the forecast decreases because the further into the future we look the less certain it becomes. Generally a 3 year forecast provides a solid base for analysis.

The default value for Forecast Years is 3, the maximum number is 10.

When Forecast Years are increased the Relative Indicators of the last year are applied as Relative Indicators for the following years added. Adjust these as required.




Input the Relative Indicator to reflect the percentage change from the previous year for this indicator. If Market Strength will remain much the same input 0, indicating no change over the previous year. If you believe it will increase by 10% then the input would be 10. If you believe it will decrease by 10% then the input would be -10.

Consider market growth, technology and regulatory impacts and customer needs. Market Strength is an indicator of the overall demand for the type of product or service you provide. This indicator has a direct relationship to forecast Annual Revenue. All things being equal as market strength increases Annual Revenue increases.




Input the Relative Indicator to reflect the percentage change from the previous year for this indicator. For an increase input a positive number, a decrease a negative number or for no change 0.

Consider your position in the market, and the impact of your current actions. This is a measure of your standing relative to the competition as perceived by potential consumers. If things will remain much the same input 0, indicating no change over the previous year. If you have actions to improve the position of your business by 10% then the input would be 10. This indicator has a direct relationship to forecast Annual Revenue. All thing being equal as Business Market Position increases Annual Revenue increases. Actions contributing to the business position must be substantiated and implemented to have an impact.




Input the Relative Indicator to reflect the percentage change from the previous year for this indicator. For an increase input a positive number, a decrease a negative number or for no change 0.

Consider the number of competitors, competitor strategies and potential new entrants. This indicator has an inverse relationship to forecast Annual Revenue. All things being equal as the level of competition increases Annual Revenue decreases.




Input the Relative Indicator to reflect the percentage change from the previous year for this indicator. For an increase input a positive number, a decrease a negative number or for no change 0.

Consider potential unit cost changes in supplier pricing for products and services used by your business, sources of supply, your bargaining power, demand for materials, and possible alternatives. This indicator has a direct relationship to all expenses except Wages, Salaries and Interest expenses. All things being equal as the unit cost of Goods and Services increases these expenses increase. In many cases this indicator is closely related to inflation.




Input the Relative Indicator to reflect the percentage change from the previous year for this indicator. For an increase input a positive number, a decrease a negative number or for no change 0.

Consider market forces and availability of skilled staff. This indicator has a direct relationship to forecast Wages and Salaries expenses. When using the Valuation Module it also has a direct relationship to forecast Owners Earning Power. All things being equal as the unit Salaries and Wages costs increase these expenses increase.




Input the Relative Indicator to reflect the percentage change from the previous year for this indicator. For an increase input a positive number, a decrease a negative number or for no change 0.

This is percentage change not actual values. For a current interest rate of 5% a relative indicator of 10 in Year 1 equates to an actual interest rate of 5.5% (5% * 1.1), a relative indicator of 10 in Year 2 takes this to 6.05% (5.5 * 1.1). This indicator has a direct relationship to forecast Interest expense. All things being equal as interest rates increase this expense increases.

If the business has no Interest Expense then Relative Indicator Interest Rates has no impact and can be left as 0.




Input the Relative Indicator to reflect the percentage change from the previous year for this indicator. For an increase input a positive number, a decrease a negative number or for no change 0.

This should reflect changes in the relationship between your Variable Expenses and revenue. If you have actions to improve your Variable Expenses Efficiency (decrease variable expenses) by 10% over the previous year input 10. Consider changes in production, distribution and marketing processes and supplies. This indicator has an inverse relationship to all forecast Variable Expenses. All things being equal, as Variable Expenses Efficiency increases, less Supplies, Wages, Distribution and Marketing resources are required to produce the same revenue resulting in a decrease in these expenses. Actions must be substantiated and implemented to have an impact.




Input the Relative Indicator to reflect the percentage change from the previous year for this indicator. For an increase input a positive number, a decrease a negative number or for no change 0.

Consider changes in administration processes, management structures and location utilization. Factors related to financing levels and requirements such as credit arrangements, debt collection and working capital are also relevant. This indicator has an inverse relationship to all forecast Fixed Expenses. All things being equal as Fixed Expenses Efficiency increases less administration, finance, management and location resources are required to produce the same revenue resulting in a decrease in these expenses. Actions must be substantiated and implemented to have an impact.




Input the Relative Indicator to reflect the percentage flow on of fixed expenses for a 100% increase in revenue. If you believe the business has surplus Fixed Expense resources (ie administration, management, location and finance utilization is less than 100%) and revenue variations will have no impact on Fixed Expenses input 0. To provide for an increase in Fixed Expenses to handle increased Revenue input a positive number. A negative number would indicate that Fixed Expenses will decrease with Revenue increases, in most cases this would not be applicable.

This indicates the estimated level of Fixed Expense adjustment required to support revenue variations. Fixed Expenses are generally considered a constant expense, however large sustained revenue variations place pressure on fixed expense resources and usually result in an increase in fixed expenses. This may include larger floor area, more administration costs or higher financing. The Fixed Expense Flow-on is the percentage of increase in Fixed Expenses for a 100% increase in revenue. A Fixed Expense Flow-on of 20 reflects a 20% increase in Fixed Costs expense for every 100% increase in Annual Revenue. This indicator has a direct relationship to all forecast Fixed Expenses.




Input the percentage change in Relative Indicators utilized to generate an Optimistic and Pessimistic Forecast. If you feel it is possible your Relative Indicator values may be in error by +/- 20% input 20. Sensitivity Analysis allows you to review the impact of potential variances from your provided input.

Forecasts are generated from the Relative Indicator values provided and Sensitivity Analysis adjusts the Relative Indicator values (not the Revenue and Expense values) by the Sensitivity % to build an Optimistic and Pessimistic Forecast.




This data is only applicable for the Valuation Module.




Input the annual income the owner could earn if employed outside the business. Include any benefits. The actual return from the business must compensate the owner for giving up external earnings and provide the required return on Investment. A return on Investment only occurs after the owner has been compensated for external earnings given up.




Input the percentage Required Return on investment for the Business Valuation. You should consider the level of risk associated with investment in the business and the return offered by alternative investments. If you can get 10% from a secure bank deposit with no (minimal) risk then you would expect substantially more from a business where you accept total responsibility for performance and risk your investment.

The Calculated Expected Valuation is provided here to show the impact of input changes. Full workings and Valuation Analysis are available from the Valuation Module.




This is the calculated Expected Business Return. It reflects the before tax annual long term return of the business. It is calculated as the Profit/Surplus less the Depreciation Allowance and less Owners External Earning Power (where applicable). Expected Business Return does not change with Sensitivity Analysis. Full workings and Sensitivity Analysis are available from the Forecast Module. It is provided here to show the impact of input changes.



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