Challenge

Evaluate a mid market company for potential acquistion against an accurate peer group of companies by completing a comprehensive financial benchmark of all similar sized companies in the target geography. Note: This can also be used by accountants, consultants and bankers to benchmark prospective clients and clients.

Solution

Using Powerlytics Business Benchmark web based product, quickly and accurately compare a company against a well defined peer group of companies, taking into account their size, industry, geographic territory and legal form of the company.

Result

A comprehensive analysis was created comparing over 80 financial statement line items on the balance sheet and income statement and over 30 key ratios. The company’s performance was compared to the performance quartiles of the peer group to understand key risk areas and areas for improvement. Based on the analysis, it was determined that the company was about 20% more highly leveraged then their peer group and their gross margins, while when in line with national averages, they were low in their primary market place. In addition, while their revenue was steady for the past 4 years, their share of the total market has decreased. This was surprising due to their advertising expenses being higher than the peer group.

Step 1. Upload targets' financial statements into Powerlytics' Business Benchmarks product.

Step 2. Create a peer group of companies by selecting the: legal form of organizations to include (corporations, partnerships, sole proprietorships), the size (based on sales, employee count or assets), the geography from US to Zip Code) and the industry (over 1,100).

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Step 3. Submit query and review income statement, balance sheet, ratio and performance quartile comparisons.

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