1.04 - Industry benchmarks
The table below describes the key whole of business and beef industry benchmarks with questions answered, methodology and a guide to performance using publicly available references.
Business benchmarks |
Question answered |
Methodology |
Guide to performance |
|
Net profit before tax profit KPI |
Will the profits meet your drawing and provisioning requirements? |
Earnings before interest, lease payments and tax |
>$100,000 = strong1 |
|
Return on assets managed profit KPI |
Is the station business meeting its operational efficiency targets? |
Earnings before interest, lease payments and tax ÷ Total assets under management |
>4% = strong2 |
|
Return on equity profit KPI |
Is the station business meeting your wealth creation targets? |
Earnings before tax ÷ Net assets under management |
>4% = strong3 |
|
Interest cover solvency KPI |
Is the station business generating enough profits to meet debt servicing obligations? |
Earnings before interest, lease payments and tax ÷ Interest and lease payments |
3 = strong |
|
Peak debt |
Will your finance arrangements cover your working capital requirements? |
Lowest working account balance for the year |
N/A |
|
Expense ratio risk KPI |
Are you generating enough income to meet your ongoing expense needs? |
Profit before interest and tax ÷ Gross income |
>30% = strong2 |