Company comparison

A company comparison is a method to obtain new knowledge by comparing company parameters and comparative values . In addition to financial figures such as sales and costs , performance indicators can and are often compared.

I. d. As a rule, company comparison means the "external" comparison of one's own company with other companies. However, an “internal” company comparison is also conceivable, in which the key figures within one's own company are e.g. B. can be compared along the organizational structure ( business area , branch , department or product group ), the time dimension (current year, previous year, time periods) or the value type (actual, plan, forecast ).

Benchmarking represents a further development of the company comparison, in which the focus is on the comparison of processes and their performance indicators. This enables companies of different industries and sizes to be compared, provided that the process to be compared covers the same area of responsibility. The benchmarking process comparisons are about identifying best practice in order to learn systematically from a model company with the best method of success.

Function and use

Operational comparisons fulfill several functions and can thus generate benefits in many areas:

Learning function - By identifying similarities and differences, the comparison of companies helps to find weak points and analyze their causes.

Motivation function - By setting target marks and comparing them with them, abstract corporate goals such as liquidity , profitability , service friendliness can be concretized. The concrete comparison with a comparable company can thus arouse competitive spirit according to the motto “we can do it too”.

Evaluation and control function - The classification and position determination of the economic situation of the company on the basis of the standards and norms obtained not only serves to secure one's own existence, but is also used by external bodies, e.g. B. in the context of the credit rating of the house banks or a purchase review ( due diligence ) of an investor .

Impact forecast function - By analyzing the influence of various parameters on z. B. the operating profit based on the key figure structure of comparable companies, an attempt is made to derive regularities in order to determine the chances of success of z. B. To be able to assess investments and thus to provide decision support.

Since these functions are all performed in a similar way by the controlling department, the company comparison is an important controlling tool.

Development and history of the company comparisons

Business newspapers were the first to make company comparisons in the 19th century, when stock market investors asked themselves how these companies should be valued when railway companies were founded and financed by issuing shares.

At the beginning of the 20th century, associations (Main Association of German Retailers, Association of German Mechanical Engineering Companies) published comparative figures for their industries for the first time. In the 1920s, the tax authorities built up the collection of guidelines for the tax authorities. The Reichskuratorium für Wirtschaftlichkeit (RKW) and the Research Center for Commerce (FFH) in Berlin began in 1928 , the Craft Institute in Karlsruhe for the crafts, and the German Savings Banks and Giro Association from 1936 .

After the Second World War, the Rationalization Board of German Business (RKW) and the Federal Statistical Office draw up key figures and cost structure surveys on the government side . Associations such as the Main Association of German Retailers and the General Association of German Wholesale and Foreign Trade have been preparing company comparisons in cooperation with the Institute for Trade Research at the University of Cologne (IfH) since 1949.

Content and form

Company comparisons work primarily with ratios, since absolute numbers are difficult to compare due to different company sizes and thus result in a distorted picture.

The focus of the key figures compared in the respective company comparison depends on the client's information needs:

Comparisons made outside the company primarily take the evaluation function, if z. B. With their collection of reference rates, tax authorities use cost structure data to check submitted tax returns for plausibility and estimate taxes in order to ensure fair taxation . Banks try to assess the default risk of credit exposures on the basis of in-house comparisons as part of their risk management .

On the other hand, company comparisons initiated by the company are also motivated by the other utility functions, so that in addition to pure financial and structural data, key performance indicators and relationship figures are required - such as number, deliveries, customers, machine hours, sales per customer, etc.

The aim is to compare the efficiency of companies in order to identify idle potential and to learn how the results can be improved.

Carriers and providers of company comparisons

The providers of company comparisons can be divided into public and private as well as according to the intention of creating the figures: for internal use or for publication (in the case of private providers for money).

There is an obligation to provide information to the public authorities (Federal Statistical Office, tax authorities, RKW) and the results are anonymized and published free of charge. Company comparisons can be purchased from private providers, often on condition that your own data is reported in the comparison, for example at DATEV or the IfH Cologne. The Landes-Gewerbeförderungsstelle des Nordrhein-Westfälischen Handwerks (LGH) has a lot of experience with company comparisons in the craft sector. Every year it prepares more than a dozen of these analyzes for individual trades and has already presented more than 550 of them (www.lgh-betriebsvergleiche.de).

In the company comparison of banks and savings banks, the financial figures of the credit customers are included without them being able to see the result or refusing to report the figures, since these comparisons remain bank-internal statistics for creditworthiness checks.

Other private sponsors of company comparisons are associations, association groups (e.g. purchasing cooperatives) or groups for the exchange of experience (ERFA groups), in which a company can or must participate as a member (depending on the statutes of the sponsor). Here, both the group of recipients of the evaluations are known or can be narrowed down and the reporting companies can also be known and identifiable within the group of participants. These comparisons are made either in-house or by external service providers.

literature

Norbert Zdrowomyslaw and Robert Kasch: Company comparisons and benchmarking for management practice: company analysis, company transparency and motivation through parameters and comparative variables 2002 ( ISBN 978-3486259353 )