Accounting and Business Consulting

Lowering waste & improving efficiency ranking by adding FP&A

Supporting analysis to this model can be found in our blog.

Enter Inputs

Enter values: Submit

Description	Input
1. Maximum waste %: Est. max for sector due to poor analysis, e.g. 40 for 40%
2. Minimum waste %:
3. From (current percentile): e.g. 10 for bottom 10%
4. Target (future percentile):
5. Annual turnover (£'000):
6. Exponential decline in waste:
7. Exponent scale:
8. Gain realised as greater t/over: e.g. 35 for 35% from lower revenue opportunity loss
9. Gross margin %:
10. Tax rate %:
11. Annual post-tax value of one-offs (£'000):

Guide to the model:

(You can find a sample FP&A benchmarking scorecard here.)

1. Enter your estimate for the upper bound of waste for firms in your peer group (as % of turnover).
2. Enter your estimate for the lower bound of waste for firms in your peer group (as % of turnover).
3. Enter your your estimate of how your firm compares to peers (use scorecard for percentile; low percentile = higher waste).
4. Enter your target percentile to reach (e.g. to be in top 10% low waste firms, enter 90).
5. Enter your current annual turnover (£'000).
6. Choose whether the reduction is linear or exponential (if low-hanging fruit or diminishing returns). Checkbox is set to exponential by default; untick to select linear.
7. Decide on how waste falls for increasing percentiles & set a scale of 1 (high) to 10 (low) for how the exponential curve declines.
8. Enter the % of added value which will be derived not as reduction in cost but as gross profit resulting from increase in revenue.
9. Enter your gross margin % (model assumes this does not change with reduction of waste).
10. Enter the corporation tax rate.
11. For investment appraisal, lumpy gains, add an estimate of the post-tax value to be gained from FP&A analysis (in £'000).
12. Submit the form to see a graphical and numeric output.