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Accounting metrics

Describes accounting metrics and the formulas produced by the financial and marketing metrics endpoints

This feature provides a set of pre-calculated ratios and metrics used to assess a company's performance. It leverages the Categories feature, which standardizes bespoke data across SMEs. After the data is standardized, meaningful insights and measurements are produced for financial performance.

Currently, to measure company performance, clients need to map each of their customer’s bespoke financial statements to a single standardized chart of accounts - this is what our Categories feature does. After financials are fully standardized, clients need to perform complex calculations in order to produce financial ratios and metrics - this is what our Financial Metrics feature does. It saves the client considerable time and effort.

With this feature, you will decrease the time to onboard customers, underwrite customers faster, easily monitor the ongoing health of your customers, and provide improved financial reporting, planning and analysis. You will have more confidence in your decisions knowing they are based on the latest, most accurate data available.

What ratios and metrics are available?

The following table lists which ratios and metrics are calculated, their formulas and how they translate to Codat data points:

Financial metrics formulas

Ratio / MetricFormulaHow that's translated to Codat data points
Gross profit margingross profit / net salesGross profit = a - b
a. SUM(Income.Operating)
b. SUM(Expense.CostOfSales)
Net Sales = a
a. SUM(Income.Operating)
EBITDAnet operating income + interest + tax + depreciation + amortizationNet Income = a - b
a. SUM(Income)
b. SUM(Expense)
Interest = (a + b) - c
a. SUM(Expense.Operating.Interest)
b. SUM(Expense.NonOperating.Interest)
c. SUM(Income.NonOperating.Interest)
Tax = a
a. SUM(Expense.NonOperating.Tax)
Depreciation = a + b
a. SUM(Expense.Operating.DepreciationDepletion)
b. SUM(Expense.Operating.Amortization)
Debt service coverage rationet operating income/total debt service
Where, total debt service = Loan interest + principal
Net Operating Income = a - (b + c)
a. SUM(Income.Operating)
b. SUM(Expense.CostOfSales)
c. SUM(Expense.Operating)
Total Debt Service = sum(a : n)
a. SUM(Expense.NonOperating.Interest)
b. SUM(Expense.Operating.Interest)
c. SUM(Expense.Operating.EquipmentRentLease)
d. SUM(Expense.Operating.BuildingRentLease)
e. SUM(Liability.Current.NotesPayable)
f. SUM(Liability.Current.LoansPayable)
g. SUM(Liability.Current.InterestPayable)
h. SUM(Liability.Current.FinanceLeaseObligations)
i. SUM(Liability.Current.CapitalLeaseObligations)
j. SUM(Liability.Current.OtherShortTermDebt)
k. SUM(Liability.Current.OtherLongTermDebt)
l. SUM(Liability.Current.CreditCards)
m. SUM(Liability.Current.ConvertibleDebt)
n. SUM(Liability.Current.DueToOfficersStockholders)
Current ratiocurrent assets / current liabilitiesCurrent Assets = a
a. SUM(Asset.Current)
Current Liabilites = a
a. SUM(Liability.Current)
Quick ratio(current assets - inventory – prepaid expenses) / current liabilitiesCurrent Assets = a
a. SUM(Asset.Current)
Inventory = SUM(a : e)
a. SUM(Asset.Current.InventoryMerchandise)
b. SUM(Asset.Current.InventoryFinishedGoods)
c. SUM(Asset.Current.OtherInventory)
d. SUM(Asset.Current.InventoryRawMaterials)
e. SUM(Asset.Current.InventoryWorkInProcess)
Prepaid Expenses = a
a. SUM(Asset.Current.PrepaidExpenses)
Current Liabilities = a
a. SUM(Liability.Current)
Free cash flowNet Income + Depreciation and amortization (non cash expense) - Working Capital Variation - Purchases of PP&E (CAPEX)Free cash flow = Net Income + Non cash expense - Working Capital Variation - Purchases of PP&E (CAPEX) where,
Net Income = a - b
a. SUM(Income)
b. SUM(Expense)
Non cash expense = sum(a : d)
a. SUM(Expense.Operating.DepreciationDepletion)
b. SUM(Expense.Operating.Amortization)
c. SUM(Expense.Operating.RevaluationImpairment)
d. SUM(Expense.Operating.EmployeeStockCompensation)
Working Capital Variation = (a - b) - (c - d)
a. SUM(Asset.Current)
b. SUM(Liability.Current)
c. PreviousPeriod's SUM(Asset.Current)
d. PreviousPeriod's SUM(Liability.Current)
Purchases of PP&E = SUM(a : j) - SUM(k : t)
a. SUM(Asset.NonCurrent.FixturesFittings)
b. SUM(Asset.NonCurrent.EquipmentMachinery)
c. SUM(Asset.NonCurrent.LandBuildings)
d. SUM(Asset.NonCurrent.LandBuildingsImprovements)
e. SUM(Asset.NonCurrent.OtherTangibleAssets)
f. SUM(Asset.NonCurrent.CapitalLeases)
g. SUM(Asset.NonCurrent.AssetsUnderConstruction)
h. SUM(Asset.NonCurrent.Goodwill)
i. SUM(Asset.NonCurrent.IntangibleAssets)
j. SUM(Asset.NonCurrent.AcquisitionsInProgress)
k. PreviousPeriod'sum(Asset.NonCurrent.FixturesFittings)
l. PreviousPeriod'sum(Asset.NonCurrent.EquipmentMachinery)
m. PreviousPeriod'sum(Asset.NonCurrent.LandBuildings)
n. PreviousPeriod'sum(Asset.NonCurrent.LandBuildingsImprovements)
o. PreviousPeriod'sum(Asset.NonCurrent.OtherTangibleAssets)
p. PreviousPeriod'sum(Asset.NonCurrent.CapitalLeases)
q. PreviousPeriod'sum(Asset.NonCurrent.AssetsUnderConstruction)
r. PreviousPeriod'sum(Asset.NonCurrent.Goodwill)
s. PreviousPeriod'sum(Asset.NonCurrent.IntangibleAssets)
t. PreviousPeriod'sum(Asset.NonCurrent.AcquisitionsInProgress)
Working capitalcurrent assets – current liabilitiesCurrent Assets = a
a. SUM(Asset.Current)
Current Liabilites = a
a. SUM(Liability.Current)
Fixed-charge coverage ratio(EBIT + Fixed charge before tax) / (Fixed charge before tax + Interest)EBIT = (a - b - c) + d
a. SUM(Income.Operating)
b. SUM(Expense.CostOfSales)
c. SUM(Expense.Operating)
d. SUM(Expense.Operating.Interest)
Fixed charge before tax = SUM(a : p)
a. SUM(Expense.Operating.GeneralAdministrative)
b. SUM(Expense.Operating.SubscriptionFees)
c. SUM(Expense.Operating.OtherEmployeeBenefits)
d. SUM(Expense.Operating.EmployeeWages)
e. SUM(Expense.Operating.BuildingRentLease)
f. SUM(Expense.Operating.EquipmentRentLease)
g. SUM(Expense.Operating.BankCharges)
h. SUM(Expense.Operating.ManagementFees)
i. SUM(Expense.Operating.ServiceChargeGroundRent)
j. SUM(Expense.Operating.DirectorsCompensation)
k. SUM(Expense.Operating.EmployeeTax)
l. SUM(Expense.Operating.Pension)
m. SUM(Expense.Operating.DepreciationDepletion)
n. SUM(Expense.Operating.Amortization)
o. SUM(Expense.Operating.EmployeeStockCompensation)
p. SUM(Expense.Operating.RevaluationImpairment)
Interest = a
a. SUM(Expense.Operating.Interest)

Marketing metrics formulas

PercentageFormulaHow that's translated to Codat data points
Marketing to revenue(revenue) / (sum of marketing operating expense)Marketing to revenue = a / b
a. SUM(Income.Operating)
b. SUM(Expense.Operating.Marketing)
Marketing to expense(sum of marketing operating expense) / (expense)Marketing to expense = a / b
a. SUM(Expense.Operating.Marketing)
b. SUM(Expense)

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