Frequently asked questions
Here you will find answers to questions that are frequently asked by users of the Financial Performance Data. If after reading the frequently asked questions you require further assistance, please use Innovation, Science and Economic Development Canada's contact us feature.
How can Financial Performance Data help my business?
Financial Performance Data can help both new and existing businesses to better understand how competing firms operate in their chosen industry.http://www.ic.gc.ca/eic/site/705.nsf/eng/00005.html#q1
How Financial Performance Data can help new businesses?
When starting a new business, one of the most important activities you can undertake is the preparation of your business plan.
Financial Performance Data can help you to complete the financial component of your business plan by providing an accurate sense of the cost structure of similar businesses in your industry.
By examining the differences in expense categories for businesses within different revenue levels you can get a more accurate reading of expected costs for firms that match your anticipated revenue level. Furthermore, you can project how the cost structure for your business may change as your business grows and revenue levels increase.http://www.ic.gc.ca/eic/site/705.nsf/eng/00005.html#q2
How Financial Performance Data can help existing businesses?
Business plans are not just for start-ups. Revisiting and updating your business plan frequently can help you to ensure that your business is performing optimally - staying on top changing business conditions, keeping tabs on the competition and injecting fresh ideas into your operations.
Whether you are putting together a formal business plan or seeking to make an operational decision, Financial Performance Data can provide insight on the operations of similar small and medium-sized businesses in your industry - from amounts spent in specific expense categories to the general health of the firms in operation.
Financial Performance Data also offers you the option of entering data from your business - annual revenue and expense data and assets/liabilities - which can be used to benchmark your small or medium sized business against relevant industry averages.
Benchmarking using Financial Performance Data can identify areas in which your business deviates from the relevant industry average, identifying opportunities to make changes to your cost structure that may help you to grow your business.
For example, if other businesses in your revenue quartile spend 8% of their revenue on Advertising and promotion and your business spends 4%, you may consider boosting spending for your business in this area.
No matter how you choose to use the data in the Financial Performance Data, it can provide you with needed perspective to help you steer your business in the right direction.http://www.ic.gc.ca/eic/site/705.nsf/eng/00005.html#q3
Where does the Financial Performance Data come from?
Financial Performance Data generates reports using data created by Statistics Canada using a sample of Revenue Canada tax returns for both incorporated and unincorporated businesses operating in Canada. The reports provide selected revenue, expense, profit and balance sheet items as well as financial ratios on small business in Canada.
For the unincorporated businesses, the data from the business income statement schedules, attached to the T1 e-file tax return, are used. For the incorporated businesses operating in Canada, the balance sheet and income statements of the General Index of Financial Information (GIFI) schedules, attached to the tax return (T2), are used.
More information on the Data Sources and Methods used to create Financial Performance Data is available from Statistics Canada.http://www.ic.gc.ca/eic/site/705.nsf/eng/00005.html#q4
What kind of data are available in the Financial Performance Data reports?
There are four distinct sections that can be displayed in the Financial Performance Data reports:
- selected revenue/expense items;
- balance sheet;
- financial ratios;
- profitable vs. non-profitable businesses.
The selected revenue/expense items include total revenue, total expenses, net profit/loss and 15 or 17 individual expense items. These data are available in two formats – as a percent of total revenue or as thousands of dollars.
The balance sheet items include total assets, total liabilities and total equities, with sub-categories for current assets and liabilities.
The financial ratios section includes up to 12 different financial ratios, including the current ratio, debt ratio and gross margin.
The profitable vs. non-profitable businesses section provides the percentage of businesses that are profitable in the selected industry. It also provides total revenue, total expenses and net profit/loss data for the profitable businesses and non-profitable businesses.
Definitions of all data items contained in Financial Performance Data reports can be found in the Glossary of Terms.http://www.ic.gc.ca/eic/site/705.nsf/eng/00005.html#q5
How do I create a Financial Performance Data report?
The How to Use Financial Performance Data section provides illustrated step-by-step instructions on how to create a report using the Financial Performance Data interface.http://www.ic.gc.ca/eic/site/705.nsf/eng/00005.html#q6
How can I find the right industry code for my business?
In the Financial Performance Data, industries are classified according to the North American Industry Classification System (NAICS).
Within the report generation module of the Financial Performance Data, two tools exist to help you to find the NAICS code for your business if it is not already known:
A hierarchical browse list that allows you to "drill down" to the desired level
A keyword search feature
For a complete list of the NAICS codes available, Statistics Canada offers the entire NAICS 2012 classification on its website.http://www.ic.gc.ca/eic/site/705.nsf/eng/00005.html#q7
Where can I find my company data to enter into the Financial Performance Data reports?
If your business is incorporated, the data that is requested in the Financial Performance Data reports is normally found in the balance sheet and income statement of the General Index of Financial Information (GIFI) schedules, attached to your Revenue Canada tax return (T2).
If your business is not incorporated, you can obtain the data from the business income statement schedules, attached to your T1 tax return, or from business accounting records or retained invoices and receipts.http://www.ic.gc.ca/eic/site/705.nsf/eng/00005.html#q8
What reference years are available in Financial Performance Data?
The Financial Performance Data application only provides data for one year. You can find previous years of data on the open data website starting in 2012.http://www.ic.gc.ca/eic/site/705.nsf/eng/00005.html#q9
How reliable are the statistics that are found in the reports?
The Data Sources and Methods page for Financial Performance Data provided by Statistics Canada provides detailed information on the sampling, editing and estimation procedures used to produce the Financial Performance Data, as well as information on the reliability of the statistics.http://www.ic.gc.ca/eic/site/705.nsf/eng/00005.html#q10
Why are there different revenue groupings available?
Businesses earning lower levels of revenue can display very different financial characteristics than businesses earning higher levels of revenue. For this reason, the reports contain financial data for the entire revenue range as well as various groupings within that range (when these groupings are selected for display).
These groupings make up the columns of the report. All reports feature the sample of businesses as one group, the whole industry. If selected, two other grouping types can be displayed on the report. The grouping type divides the sample into four parts, the quartiles.
These groupings divide the industry into segments so that comparisons between businesses with different total annual revenue levels can be made. The revenue boundary for each grouping is indicated by the low and high values appearing at the top of each column. The last column shows the percentage of businesses in the sample that reported each expense item on their tax form.http://www.ic.gc.ca/eic/site/705.nsf/eng/00005.html#q11
What do quartiles in Financial Performance Data reports refer to?
The quartiles divide all of the small and medium sized businesses that operate within the selected industry into four groups (quartiles) of the same size based on levels of revenue generated.
All of the businesses in the selected industry are ranked according to annual revenue generated.
The Bottom Quartile consists of the 25% of businesses with the lowest reported operating revenue.
The Lower Middle consists of the 25% of businesses with reported operating revenue above the cut-off for the Bottom Quartile and below the median revenue level.
The Upper Middle consists of the 25% of businesses with reported operating revenue above the median revenue level and below the cut-off for the Top Quartile.
The Top Quartile consists of the 25% of businesses with the highest reported operating revenue.
You can use the quartile that best reflects the revenue level your business generates to obtain a more relevant benchmark. Businesses with high levels of revenue can have very different cost structures than those with low levels of revenue, even within the same industry.http://www.ic.gc.ca/eic/site/705.nsf/eng/00005.html#q12
Why is my report missing some of the sections available?
Some sections of the Financial Performance Data reports are only available for particular Business Types. The Business Type you select in the report generation process will determine which sections appear in your report.
There are four different sections that can be displayed in the Financial Performance Data reports:
selected revenue/expense items;
balance sheet items;
financial ratios; and
profitable vs. non-profitable businesses.
Different information is available from the Financial Performance Data depending upon the type of business you have selected to display: unincorporated (T1), incorporated (T2) and all businesses (T1+T2).
Because unincorporated (T1) businesses do not submit balance sheet information on their T1 tax returns, the balance sheet report section will not be displayed.
The financial ratios are generated using the revenue, expense and balance sheet data. The full set of 12 ratios is available only for the T2 businesses, since T1 businesses are not required to submit a balance sheet to Canada Revenue Agency. However, a subset of two ratios is available for both the T1 and T1+T2 breakdowns.
The profitable vs. non-profitable business comparison is only made at the all businesses (T1+T2) level. Businesses are first grouped as profitable (net profit is zero or positive) or non-profitable. The percentage of businesses that are profitable, along with total revenue, total expenses and net profit/loss for both groups, can then be shown.
The table below presents a summary of the sections available by business type selected:
|Type of Information||Unincorporated (T1)||Incorporated (T2)||All (T1 + T2)|
|Financial ratios||Yes, but 2 only||Yes, all||Yes, but 2 only|
|Profitable vs. Non-Profitable businesses||No||No||Yes|
What are the Quality indicators?
Quality indicators are available to provide data users with information on the accuracy of the published estimates. Although, as a census, estimates contained in the small business profiles are not subject to sampling error, the quality of displayed values are still subject to other factors, including imputation. Imputation is a process whereby records with missing data are assigned values based on the data of records with more complete data. This is performed in two cases, when a data point reported by a business is judged to fall outside the limits of statistically coherent values or when a business fails to itemize all or part of the required information. Imputation methods used by Statistics Canada include, but are not limited to, historical imputation, donor imputation, and generic-to-detail allocation. The quality indicators below are a measure of the amount of imputation contributing towards a given value.
|E||Use with caution|
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