BDC Guides Businesses on Finding Financial Ratio Benchmarks

The Business Development Bank of Canada (BDC) has provided businesses with resources to better understand their financial performance relative to competitors. A recent guide outlines where entrepreneurs can find industry-specific data for their company's financial ratios, a key step in assessing business health and profitability.

According to BDC, comparing financial ratios is crucial for evaluating a company's long-term viability. These ratios are used by lenders, such as banks, to assess a business's standing within its industry. They help identify areas like excessive debt, inventory management issues, or slow accounts receivable collection.

The guide suggests starting with one's banker, who can provide insights into the ratios banks typically evaluate. BDC also offers a free online tool, the "workforce efficiency benchmarking tool," allowing companies to compare their productivity levels with others in their sector confidentially.

For broader data, Statistics Canada maintains extensive financial performance data for the Canadian economy, including current ratio values for most industry sectors. Local Chambers of Commerce and industry associations are also recommended sources for sector-specific and regional benchmarks. BDC notes that while many sources may be U.S.-based, they offer valuable comparative insights.