In Part 1 of this three-part blog series, we introduced benchmarking and chose four staffing companies from clients in the employment services industry to demonstrate the financial metrics that we used for benchmark analysis. In part 2, we will take a look at the key findings from this analysis.
Comparison can be the thief of joy, but when you are trying to grow your company, comparison with competitors and industry benchmarks can be illuminating and essential. Here are benchmarks analyses that we performed for our client staffing company:
- Interest Coverage. This is a debt and profitability ratio used to determine how easily a company can pay interest on its outstanding debt. The higher the ratio, the better prepared it is to pay its debts. A lower ratio may be unattractive to investors because it may mean the company is not poised for growth. The industry had 2.63 interest coverage. Four companies overperformed with ratios between 10.44 and 89.55.
With these key findings in place, we can begin to think clearly about how to improve performance. Please stay tuned for Part 3 of this benchmarking blog series, in which we will discuss the solutions!
Our CAS team is helping businesses of all sizes gain a competitive advantage by focusing on specific practices and operations that are centered around your needs and goals. We offer insight and support to help you make critical business decisions that lead to improved profitability. If you have any questions about benchmarking in your industry, please leave a comment below or feel free to contact me directly. I’m happy to help!