The Business Financials Excel Template (BFET)
Setting up ratios and KPIs in a BFET involves a few key steps. First, define your KPIs and ratios. These could be financial ratios like debt-to-equity, current ratio, quick ratio, or profitability ratios. Your KPIs might include net profit margin, gross profit margin, operating profit margin, return on assets, return on equity, and so on.
Once your KPIs and ratios are defined, create a BFET with designated sections for each KPI and ratio. The template should include input fields for the financial data needed to calculate each ratio or KPI. For instance, for the current ratio (Current Assets / Current Liabilities), you would need fields for current assets and current liabilities.
This BFET is then populated with the financial data for each business. With the help of Excel’s built-in formulas, the KPIs and ratios will be automatically calculated as soon as the relevant data is inputted from Boss Insights.
Understanding Customers at Scale through KPIs and Ratios
This BFET offers a streamlined and scalable method for understanding customers. With Boss Insights entering each business’s financial data into the template, you can quickly calculate and analyze a broad range of KPIs and ratios. This in turn allows you to gain insights into the financial health and performance of each business at scale.
You can identify trends, detect potential issues, and spot opportunities within the portfolio, all of which are crucial for making informed strategic decisions. Furthermore, these insights can be used to tailor your interactions and offerings to each customer via rule-based insights, thereby enhancing customer engagement and satisfaction.
Solving the Explainability Problem
The use of a BFET also addresses the explainability problem. When a ratio or KPI is calculated within the template, the underlying calculation is transparent and easily understood. Each number is clearly linked to the financial data that was input into the template, allowing for straightforward traceability.
This transparency not only makes it easier to explain how a particular number was reached but also enhances trust in the data. If there are any questions or concerns about a particular KPI or ratio, the calculations can be easily reviewed and verified within the template. This transparency and accountability are vital for maintaining credibility and confidence in your financial metrics.
Please visit our Business Financial Excel Template documentation for tutorials and more details.