What is the Sageworks Industry Data Report?
Sageworks Industry Data is a report that provides real time industry data, showing the number of financial statements behind each industry average. This product also allows you to mine the data through queries.
- Provides detailed industry-specific recommendations and key performance indicators (KPIs) for improvement in Sales, Profitability, and Liquidity (*with Company Comparison)
- Incorporates real-time industry data, stratified by country and/or region and/or sales range
- Industry data is compiled solely from Sageworks customers
- Can be used for reference and research
- Provides current industry statistics of the industry (*with Company Comparison)
- Use in preparation of prospect meetings to become familiar with industry benchmarks and trends
- Shows the number of financial statements behind each industry average
- Value-added report: great for cross-selling and prospecting
Where Do the Industry Averages Come From?
The Sageworks Industry Data industry averages are compiled in real-time by data entered from our existing customer base.
OVERALL TECHNOLOGY AND DATA COLLECTION METHODS
The diagram below outlines the basic methodology by which Sageworks gathers and publishes data:
In Figure 1, data is entered by our customer directly to our core application, which has been brought to market in two large platforms, Sageworks™ and Sageworks Analyst™. As financial professionals enter data, Sageworks takes the summary financial data of the company and organizes it by industry sector (by NAICS or NTEE code) by sales size and by region of the country.
In Figure 2, the financial data is screened by two basic methods:
1. Customers select whether the data entered is from “actual” financial statements or is just “sample” data. Sample data is discarded by the system.
2. Data that is “unusual” is also discarded from the data collection process. There are many rules that are applied to the data, but a good general guideline is that Sageworks throws out data that is outside the bounds of two standard deviations. A two pass standard deviation approach is employed; the data is normalized, the bounds are calculated using two standard deviations, and the outliers are discarded. This process is then repeated a second time.
In Figure 3, Sageworks collects data and stores it in a database, where it is updated daily. The company refreshes the data and then makes the data available in Figure 4 under “publishing.”
In Figure 4, the data is published. The platform is called “Sageworks Industry Data.” Only industries and segments that have three or more screened reports for each segment are published.
LIMITATIONS TO THE DATA AND THE USE OF THE DATA
Even though Sageworks has attempted to overcome important limitations to the current methodology of gathering similar data, all benchmarking has limitations:
1. Benchmarks are estimates under the best of circumstances. As such, they can never be used as absolutes.
Benchmarks cannot always be used for qualitative “good” or “bad” judgment calls. A company that might be above a particular industry segment (be above the industry “norm”) might operate in a poor industry and make a poor investment choice despite its “above average” score on a given metric. Or, a company that might be below a particular industry segment (be below the industry “norm”) might operate in a highly profitable industry and make a great investment choice despite its “below average” score on a given metric