FAQs
Here you will find answers to questions that are frequently asked by users of SME Benchmarking Tool. If after reading the frequently asked questions you require further assistance, please use Industry Canada's contact us feature.
- Where does the SME Benchmarking Tool data come from?
- What kind of data are available in SME Benchmarking Tool reports?
- How do I create a SME Benchmarking Tool report?
- How can I find the right industry code for my business?
- Where can I find my company data to enter into SME Benchmarking Tool reports?
- How "small" are the businesses represented in SME Benchmarking Tool?
- What reference years are available in SME Benchmarking Tool?
- How reliable are the statistics that are found in the reports?
- Why are there different revenue groupings available?
- What do the halves and quartiles in SME Benchmarking Tool reports refer to?
- Why is my report missing some of the sections available?
- Why are some of the columns in my report blank?
- What are the quality indicators?
Where does the SME Benchmarking Tool data come from?
SME Benchmarking Tool reports are generated using data from the Small Business Profiles (SBP), which were created by Statistics Canada using a sample of Revenue Canada tax returns for both incorporated and unincorporated businesses operating 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.
The most recent version of the Small Business Profiles is for 2010.
More information on the Data Sources and Methods used to create the Small Business Profiles is available from Statistics Canada.
What kind of data are available in SME Benchmarking Tool reports?
There are four distinct sections that can be displayed in SME Benchmarking Tool 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 SME Benchmarking Tool reports can be found in the Glossary of Terms.
How do I create a SME Benchmarking Tool report?
The How to Use SME Benchmarking Tool section provides illustrated step-by-step instructions on how to create a report using the SME Benchmarking Tool interface.
How can I find the right industry code for my business?
In SME Benchmarking Tool industries are classified according to the North American Industry Classification System (NAICS).
Within the report generation module of SME Benchmarking Tool, 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 Cananda offers the entire NAICS 2007 classification on its website.
Where can I find my company data to enter into SME Benchmarking Tool reports?
If your business is incorporated, the data that is requested in SME Benchmarking Tool 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.
How "small" are the businesses represented in SME Benchmarking Tool?
The reports are representative of all businesses operating within the specified industry and geographic area and earning between $30 thousand and $5 million in total annual revenues for the reference year.
What reference years are available in SME Benchmarking Tool?
Small Business Profiles have been produced for reference years 1991, 1993, 1995, 1997, 2000, 2002, 2004, 2006, 2008 and 2010.
The SME Benchmarking Tool Application only provides data for 2010.
Note: Trend analysis is not the primary usage for which the data are intended and is complicated by the continuously changing tax programs and databases that supply the input data. Data users should especially be aware that estimates for unincorporated businesses are collected from E-filers only in 2004 and in 2006. In 2008 and 2010, unincorporated businesses data is available on census basis. These changes are the primary reason for only having one year of data available.
How reliable are the statistics that are found in the reports?
The Data Sources and Methods page for the Small Business Profiles provided by Statistics Canada provides detailed information on the sampling, editing and estimation procedures used to produce the Small Business Profiles, as well as information on the reliability of the statistics.
Please take note of the important changes brought to the methodology used to produce the 2010 profiles. The data source on the non-incorporated business comes from a census starting in 2008. Previous year’s data were based on a sample of these businesses and were sent by tax filers electronically. The methodology used to classify the non-incorporated businesses, according to the North American Industry Classification System was modified to take into account first and foremost all corporate returns from Revenue Canada.
These changes increased the profiles in 2010 as to how the non-incorporated businesses were treated. People need to be aware of this change and the differences from 2006 to 2010. Given the break in the series, this could give you a significant difference in the numbers. This does not reflect changes in the economy. Longitudinal studies are not the primary use for the data and are not recommended.
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 first grouping type divides the sample into two parts, a lower half and an upper half. The second 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.
What do the halves and quartiles in SME Benchmarking Tool reports refer to?
Halves
The halves divide all the small and medium sized businesses that operate within the selected industry into two groups (halves) 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 Lower Half consists of the 50% of businesses with the lowest reported operating revenue.
- The Upper Half consists of the 50% of businesses with the highest reported operating revenue.
Quartiles
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 half or 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.
Why is my report missing some of the sections available?
Some sections of SME Benchmarking Tool 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 SME Benchmarking Tool reports:
- selected revenue/expense items;
- balance sheet items;
- financial ratios; and
- profitable vs. non-profitable businesses.
Different information is available from SME Benchmarking Tool 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 CRA. 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) |
|---|---|---|---|
| Selected expense | Yes | Yes | Yes |
| Balance sheet | No | Yes | No |
| Financial ratios | Yes, but 2 only | Yes, all | Yes, but 2 only |
| Profitable vs. non-Profitable businesses |
No | No | Yes |
Why are some of the columns in my report blank?
Columns in SME Benchmarking Tool reports may appear blank if data cannot be displayed due to Statistics Canada's policy on confidentiality.
Statistics Canada is prohibited by law from releasing any information that can identify an individual, a firm or an organization. All data are subject to confidentiality restrictions prior to release. For the Small Business Profiles, the following rules are used to determine whether data meet confidentiality restrictions:
- A profile will not be published if the sample size is less than 5 records.
- A half or quartile will not be published if there are fewer than 4 sample records falling into the half or quartile.
- If a half or quartile is suppressed, the corresponding half or quartile is also suppressed.
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.
| A | Excellent |
|---|---|
| B | Very Good |
| C | Good |
| D | Acceptable |
| E | Use with caution |
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