What Sector Evaluation measures
Most quick company checks stop at one number: is net profit positive. Sector Evaluation instead follows the same revenue through four successive cost layers — purchasing, operating expenses, financing, and total assets employed — and rates the profit left behind at each one.
Eight figures already sitting in a standard income statement and balance sheet — six entered directly, two derived automatically — produce:
Why run this test
The model exists to shorten the distance between "here are the year-end figures" and "here's where performance is strong and where it's under pressure."
- Defining when fiscal and monetary policy should be used by officials.
- Is there a waste of available resources within the sector?.
- Is monetary policy negatively impacting the sector?.
- Is the sector's efficiency significant? Is it struggling or attractive to investment?.
Four layers, one reconciliation pass
The engine runs server-side (PHP) on every submission, following the same five-step sequence each time:
Reconcile
Confirm Total assets exceed Net profit. If the figures don't reconcile, the model stops and flags it.
Layer the profit
The same revenue is carried through four successive deductions — none, purchasing, purchasing + expenses, purchasing + expenses + interest — producing four distinct profit figures.
Rate each layer
For each layer, a turnover-adjusted revenue figure is divided by that layer's profit and placed on a seven-band scale running from Excellent to Loss.
Cross-reference
Each layer's rating is compared with the one before it, so a rating that slips (or holds, or improves) points at exactly which added cost caused the change.
Report
The four ratings, their cross-reference notes, and an overall verdict are assembled below and can be exported as a one-page PDF.
Engine note: the narrative wording for each layer is generated algorithmically from its rating band and its comparison with the previous layer — it is a modern reconstruction of the reporting logic, not a recovered copy of the original archived report files.
Six figures from the financial statements
Only six numbers are entered by hand; gross profit and net profit are derived automatically.
Seven bands, one direction
A low ratio means profit holds up well against what's committed — that's good. A high ratio means profit is thin relative to what's committed — that's poor. A negative profit at any layer is rated Loss regardless of the ratio's size.
| Band | Product / Activity / Financing ratio | Asset efficiency ratio |
|---|---|---|
| Excellent | ≤ 2.0 | ≤ 2.0 |
| Very good | 2.0 – 4.0 | 2.0 – 4.0 |
| Good | 4.0 – 7.0 | 4.0 – 6.0 |
| Average | 7.0 – 12.0 | 6.0 – 14.0 |
| Poor | 12.0 – 50.0 | > 14.0 |
| Very poor | > 50.0 | — |
| Loss | profit at that layer is negative | profit at that layer is negative |
Where this gets used
What it's good for
- Free and instant — no account, no file upload, no data retained.
- Only six inputs; gross and net profit are calculated automatically.
- Built-in reconciliation catches inconsistent figures before they mislead the reading.
- Four-layer view instead of a single number, so the source of a weak result is traceable.
- Produces a portable, one-page PDF report at the end.
What it doesn't do
- Single-period snapshot — it does not show a trend across years.
- The rating bands are generic thresholds.
- Only as accurate as the figures entered — statement figures should already be finalized or audited.
- Doesn't capture qualitative factors: management quality, market conditions, pending litigation.
- Not a substitute for a professional audit or a formal credit assessment.
- The narrative wording per layer is generated from rating bands, not a verbatim archived report.
Run your own evaluation
All six fields are required. This form now submits to the server (PHP), which reconciles the figures, computes the four ratios, and renders the report below .
Try the Tool Right Now
Enter the eight figures from your financial statements. The model will automatically check their consistency, then show your diagnostic report right below.