Business by Numbers

1 What is a “Data-Led” Business?
1.1 The Universal Laws of Business
1.2 Data: The DNA of business.
1.3 The four building blocks of Data Analytics.
1.4 Why measure things in business?
1.5 Developing Insights from Data
1.6 Building a Data-Led Organization
1.6.1 Metrics for Determinants of Business Success
1.6.2 Metrics for Business Development
1.6.3 Metrics for Finance & Accounting
1.6.4 Metrics for Investment Analysis
1.6.5 Metrics for Business Modelling
1.6.6 Advanced Analytical Techniques
1.7 Terminology used in this book
1.7.1 Formula Classifications
1.7.2 Basic level formulas
1.7.3 Derived Analytics Formulas
1.7.4 Predictive Analytical Formulas
1.7.5 Business Modelling Algorithms.
1.7.6 Using Constants, Coefficients & Weights
1.7.7 Adjusting and Adapting Formulas
1.7.8 Weights
1.8 Data Quality, Reliability & Errors.
1.8.1 Data Quality
1.8.2 Data Reliability
1.8.3 Data Errors
1.8.4 Model Stability Calculations
1.8.5 Automated Data Monitoring
1.8.6 Data Processing & Reduction
1.9 Artificial Intelligence (AI) in business analytics.
2 Determinants of Business Success
3 Market Demand
3.1 The Analytical Approach
3.1.1 Market Demand Parameters
3.1.2 Market Demand – Data Sources & Analytical Techniques
3.2 The Market Demand Function
3.2.1 Income, Influence & Demand (I)
3.2.2 Consumer Preference (T)
3.2.3 Survey-Based Scoring
3.2.4 Social Sentiment Analysis
3.2.5 Search Volume Indexing (Calculating Interest by Proxy)
3.2.6 Consumer Expectation Index (E)
3.2.7 Number of Buyers in the Market (N)
3.2.8 The Cross Elasticity of Demand Function (XED)
3.2.9 Substitute Goods Price Effect (S)
3.2.10 Complementary goods price (C)
3.3 Complete Demand Forecast Examples
3.3.1 Demand for Smart Air Purifiers in an Urban Market
3.3.2 Demand Estimation for HPLC Columns in a Regional Life Sciences Market
3.4 Demand Forecast Accuracy
3.5 Factors Influencing Demand
3.5.1 Sales Related Indicators
3.5.2 Marketing Related Indicators
3.5.3 Macro-Economic & Environmental Indicators
3.6 Measuring Markets
3.6.1 Calculating Market or Segment Share
3.6.2 Market Sizes
3.6.3 Measuring the Total Addressable Market (TAM)
3.6.4 Market Growth
3.6.5 Overall Market Share (HHI)
3.6.6 Segment Market Share
3.6.7 Market share derived from a value proposition:
3.6.8 Market Diffusion
4 Capital Availability
4.1 Capital Availability as a success determinant
4.2 The Capital Availability Index (CAI)
4.2.1 The Capital Availability Index (CAI) Formula
4.3 The Business Profile
4.3.1 Business Stage
4.3.2 Industry Capital Intensity
4.3.3 Asset Structure
4.3.4 Ownership & Governance
4.3.5 Business Profile: Example 1
4.3.6 Business Profile Example 2
4.4 Financial Priorities
4.4.1 CapEx vs OpEx Balance
4.4.2 Working Capital Buffer
4.4.3 Debt Tolerance
4.4.4 Capital Stack Flexibility
4.4.5 Weighting table (examples)
4.4.6 Financial Priorities Example 1
4.4.7 Financial Priorities Example 2
4.5 The Strategic Levers
4.5.1 Growth Strategy Fit
4.5.2 Timing Sensitivity
4.5.3 Risk Appetite
4.5.4 Strategic Partnerships
4.5.5 Strategic Levers Example 1
4.5.6 Strategic Levers Example 2
4.6 The Internal Financial Metrics
4.6.1 Liquidity Ratios
4.6.2 Cash Flow Strength
4.6.3 ROIC or Profit Margins
4.6.4 Leverage
4.6.5 Internal Financial Metrics Example 1
4.6.6 Internal Financial Metrics Example 2
4.7 The Market & Economic Context
4.7.1 Regional Market Access
4.7.2 Economic Stability
4.7.3 Investor Sentiment
4.7.4 Regulatory Complexity
4.8 Capital Availability Index Summary & Examples
5 Management Effectiveness
5.1 Leadership - Strategic Alignment
5.1.1 Analytical Approach
5.1.2 Measuring Leadership & Strategic Alignment
5.2 Leadership – Effectiveness Score
5.2.1 Analytical Approach
5.2.2 Employee Engagement Score (EES)
5.2.3 Decision Quality Score (DQS)
5.2.4 Organisational Performance Score (OPS) (30%)
5.2.5 Leadership Perception Index (LPI)
5.2.6 Stakeholder Confidence Metric in Leadership Metrics
5.2.7 Output Achieved
5.2.8 Return on Capital Employed (ROCE)
5.3 Measuring Organizational Health
5.3.1 Workforce Planning Effectiveness (WPE)
5.3.2 Team Productivity Index (TPI)
5.3.3 Employee Training and Investment (ETIS)
5.3.4 Employee Retention Rate (ERR)
5.3.5 Employee Turnover Risk (ETRI)
5.3.6 Workforce Productivity Ratio (WPR)
5.3.7 Innovation Participation (Leadership) (IPR)
5.3.8 Discretionary Flex
5.3.9 Composite Health Score
5.4 Execution & Operational Discipline
5.5 Cultural Health & Communication (CHCS)
5.6 Governance & Ethical Performance
5.7 Bias Resistant Assessment Tool
5.8 Financial Metrics for Management Effectiveness
5.9 Case Example
5.1 Summary
6 Business Model Viability
6.1 Part A: The Financial Engine
6.1.1 Financial Engine – Revenue
6.1.2 Financial Engine – Costs
6.1.3 Financial Engine – Pricing
6.2 Part B: Customer & Market Alignment
6.2.1 Customer Relationships
6.2.2 Target Market Specificity
6.2.3 Measuring the Value Proposition
6.2.4 Average Satisfaction Score
6.2.5 Partnerships
6.3 Part C: Operational & Channel Efficiency
6.3.1 Debt-to-Equity Ratio (D/E)
6.3.2 Capital Utilization Rate
6.3.3 Current Ratio (Working Capital Ratio)
6.3.4 Activity Analysis
6.3.5 Productivity
6.3.6 Quantitative Metrics for Distribution Channels
6.3.7 Quality & Compliance
6.3.8 Physical Resources
6.4 Part D: Resource Leverage
6.4.1 Financial Resources
6.4.2 Intellectual Resources
6.5 Part E: Strategic Fit & Resilience
6.5.1 Composite Metric: Strategic Resilience Score (SRS)
6.6 Business Model Viability Index

7 Marketing & Sales Efficacy
7.1 Positioning & Product-Market Fit
7.1.1 Customer Problem Fit Index (survey-based)
7.1.2 Unique Value Proposition Score
7.1.3 Market Responsiveness Ratio
7.1.4 Net Promoter Score (NPS)
7.1.5 A performance-adjusted NPS formula:
7.1.6 Repeat Use or Renewal Rate
7.2 Pricing Strategy
7.2.1 Price-to-Value Perception Score (PVPS)
7.2.2 Gross Margin – As a Strategic Pricing Indicator
7.2.3 Price Elasticity of Demand
7.2.4 Price Elasticity Score
7.2.5 Willingness to Pay Index
7.2.6 Discount Dependency
7.2.7 Competitive Price Positioning Score
7.2.8 Composite Pricing Strategy
7.3 Placement & Channel Effectiveness
7.3.1 Channel Reach Efficiency
7.3.2 Channel Conversion Rate
7.3.3 Cost per Acquisition by Channel
7.3.4 Brand Alignment Score by Channel
7.3.5 Channel Mix Diversification
7.3.6 Fulfillment & Delivery Efficiency
7.3.7 Composite Channel Effectiveness Score (CCES)
7.4 Promotion & Message Resonance
7.4.1 Message Clarity & Relevance Score
7.4.2 Emotional Resonance Score
7.4.3 Media Engagement Efficiency
7.4.4 Campaign Conversion Rate
7.4.5 Media Spend ROI
7.4.6 Brand Recall or Recognition Score
7.5 Performance & Conversion Metrics
7.5.1 Lead-to-Customer Conversion Rate
7.5.2 Repeat Purchase or Renewal Rate
7.5.3 Customer Acquisition Cost Payback Period
7.5.4 Marketing-Attributed Revenue Share
7.5.5 Funnel Conversion Efficiency
7.5.6 Lifetime Value to CAC Ratio (LTV:CAC)
7.5.7 Composite Performance & Conversion Index (PCI)
7.6 Sales Pipeline Analytics & Forecasting.
7.6.1 Average Transaction Value
7.6.2 Sales Growth Rate
7.6.3 Percentage Change in Sales Volume:
7.6.4 Percentage Average Change in Sales:
7.6.5 Average Change in Sales Volume Over Multiple Periods:
7.6.6 Normalised % Change in Sales Volume
7.6.7 Win Rate
7.6.8 Total revenue versus forecast, target or quota. (Z Chart)
7.7 Forecasting Sales
7.7.1 Quantitative Forecasting Techniques
7.7.2 Basic Sales Forecasting Methods
7.7.3 Advanced Sales Forecasting Techniques
7.8 Measuring Customers
7.8.1 Lead Conversion Rate
7.8.2 Customer Acquisition Rate
7.8.3 Customer Acquisition Cost (CAC)
7.8.4 Customer Acquisition Payback Period
7.8.5 Customer Lifetime Value (CLV)
7.8.6 Value to Acquisition Cost Ratio (CLV:CAC)
7.8.7 Customer Relationship Quality
7.8.8 Customer Perceived Value
7.8.9 Cost Per Lead
7.9 Customer Retention
7.9.1 Customer Retention Rate
7.9.2 Customer Satisfaction Score
7.9.3 Net Promoter Score
7.9.4 Customer Effort Score
7.1 Measuring Market Share
7.10.1 Segment Market Share
7.10.2 Market share derived from a value proposition:
7.10.3 Market Share Gain
7.10.4 Product Performance & Adoption Metrics
7.10.5 Product Quality & Satisfaction Metrics
7.10.6 Innovation & Market Fit Metrics
7.10.7 Brand & Perception Metrics
7.10.8 Unique Selling Proposition (USP) Awareness
7.11 Place
7.12 Promotion
7.12.1 Conversion Rate
7.12.2 Average Satisfaction Score
7.12.3 Click Through Rate (CTR)
7.13 Performance
7.13.1 Marketing Spend Effectiveness Index (MSEI)
7.13.2 Marketing ROI (Return on Investment)
7.13.3 Return on Investment (Marketing ROMI)
7.13.4 Digital Marketing Metrics
7.13.5 Order Fulfilment Rate
7.13.6 Key Takeaways:
7.14 Markets
7.14.1 Key Market Intelligence Data
7.14.2 Market Structure

8 Customer Satisfaction
8.1 Net Promoter Score
8.2 Customer Retention Rate
8.3 Sales Performance
8.3.1 Sales Growth Rate
8.3.2 Win Rate
8.3.3 Average Deal Size
8.3.4 Sales Productivity
8.4 Customer Retention Rate %
8.4.1 Customer Churn Rate
8.4.2 Engagement Rate (Social Media/Email)
8.5 Market and Demand Analysis
8.5.1 Market Penetration Rate
8.5.2 Forecasted Demand

9 Operational Efficiency
9.1 Cost Reduction
9.1.1 Cost Efficiency Metrics
9.1.2 Process Optimization Metrics
9.1.3 Resource Utilization Metrics
9.1.4 Waste Reduction Metrics
9.1.5 Automation & Technology Impact Metrics
9.1.6 Supplier & Procurement Efficiency Metrics
9.1.7 Maintenance & Asset Management Metrics
9.1.8 Cost Avoidance & Risk Mitigation Metrics
9.2 Increased Productivity
9.2.1 Labor Productivity Metrics
9.2.2 Process Efficiency Metrics
9.2.3 Automation & Digital Productivity Metrics
9.2.4 Asset & Equipment Utilization Metrics
9.2.5 Supply Chain & Inventory Productivity Metrics
9.2.6 Collaboration & Workflow Efficiency Metrics
9.2.7 Financial Productivity Metrics
9.3 Better Resource Management
9.4 Enhanced Customer Satisfaction
9.5 Competitive Advantage
9.6 Scaling Operations
9.7 Risk Management
9.7.1 Sales Forecasting in a Volatile or Turbulent Market
9.8 Process Optimization
9.9 Technology Integration
9.1 Performance Metrics
9.11 Supplier and Inventory Management
9.12 Continuous Improvement Culture
10 Innovation Competence
10.1 Innovation Adoption Rate (IAR)
10.2 Research & Development (R&D) Intensity
10.3 Return on Innovation Investment (ROII)
10.4 Technology Maturity Index (TMI)
10.5 Time-to-Innovation (TTI)
10.6 Employee Innovation Contribution Rate (EICR)
10.7 Customer-Driven Innovation Index (CDI)
10.8 Metrics for Operational Technology Adoption
10.9 Technology Utilization Rate (TUR)
10.1 Operational Cost Reduction from Technology
10.11 Technology Deployment Efficiency (TDE)
10.12 Employee Technology Adoption Rate (ETAR)
10.13 Return on Technology Investment (ROTI)
10.14 Process Automation Ratio (PAR)
10.15 Technology Downtime Impact (TDI)
10.16 Customer Satisfaction Improvement (CSI)
10.17 Relative Importance of Innovation Metrics

11 Legal & Compliance
11.1 Compliance Rate
11.2 Training Coverage Score (TCS)
11.3 Policy Coverage Score (PCS)
11.4 Audit Resolution
11.5 Regulatory Audit Pass Rate
11.6 Reporting Responsiveness (RRS)
11.7 Legal Risk Mitigation Score (LRMS)
11.8 Incident Resolution Efficiency
11.9 Legal Expenditure Efficiency
11.1 Governance Effectiveness Score
11.11 Ethical Compliance Index
11.12 Non-Compliance Cost Impact
11.13 Relative Importance of Compliance Metrics
12 The Economic Environment
12.1 The Economic Environment
12.1.1 Economic Volatility
12.1.2 Global Economics
12.1.3 Regulatory Impact
12.1.4 Technological Impact
12.1.5 Economic Impact on Capital Availability
12.2 Econometrics
12.2.1 The Economic Environment as a Key Determinant of Success
12.3 Macro-Economic Indicators
12.4 Economic Risk Analysis
12.5 Economic Factors impacting success.
12.6 Economic Growth (GDP)
12.6.1 Economic Growth Influence Score (EGIS)
12.6.2 Inflation based on historical data
12.6.3 Employment Impact Factor
12.6.4 Interest Rate Sensitivity
12.6.5 Credit Spread.
12.6.6 Credit Spread Formula:
12.6.7 Consumer Confidence:
12.6.8 Consumer Confidence Impact
12.6.9 Percentage Change in GDP
12.6.10 Economic Growth Influence
12.6.11 Money Supply
12.6.12 Money Supply
12.6.13 Money Supply Growth Rate
12.7 Interest Rates
12.7.1 Interest Rates:
12.7.2 Interest Rate Forecasting
12.7.3 Interest Rate Sensitivity Index
12.7.4 Weighted Average Cost of Capital (WACC)
12.7.5 Interest Rate Volatility
12.8 Inflation Forecasting
12.8.1 Inflation Rates:
12.8.2 ARIMA Model for Inflation Forecasting
12.8.3 Forecasting Inflation rate in a stable economy
12.8.4 Inflation Sensitivity Index
12.8.5 Inflation Volatility
12.9 Employment Forecasting
12.9.1 Employment Levels and Labor Market Conditions:
12.9.2 Employment Impact Factor
12.1 Consumer Confidence
12.10.1 Consumer Confidence Impact
12.11 International Trade Exposure & Risk
12.11.1 Trade Policy Exposure
12.12 Exchange Rate Metrics
12.12.1 Exchange Rate Exposure Risk
12.12.2 Exchange Rate Volatility Analysis
12.13 Market Dependency Ratio
12.14 Economic Resilience Score
13 Metrics for Finance & Accounting
13.1 Liquidity
13.1.1 Current Assets
13.1.2 Current Liabilities
13.1.3 Current Ratio (Working Capital Ratio)
13.1.4 Quick Ratio (Acid-Test Ratio)
13.1.5 Working Capital Intensity Ratio
13.1.6 Cash Ratio
13.1.7 Retained Earnings and Capital Accumulation
13.1.8 Reserve Funds
13.2 Profitability
13.3 Profit Performance
13.3.1 Profit Analysis
13.3.2 Gross Profit
13.3.3 Gross Profit Margin
13.3.4 Operating Profit Margin (EBIT Margin)
13.3.5 Net Profit
13.3.6 Net Profit Margin
13.3.7 Cost Structure Efficiency
13.3.8 Capital Expenditure (CapEx) Requirement
13.3.9 Research & Development Investment
13.3.10 Return on Equity (ROE)
13.3.11 Return on Assets (ROA)
13.3.12 Economic Value Added (EVA)
13.3.13 Revenue Growth Rate (Normalised)
13.4 Capital Efficiency
13.4.1 Inventory (Stock) Turnover Ratio
13.4.2 Asset Turnover Ratio
13.4.3 Capital Intensity Ratio
13.4.4 Asset Structure Ratio
13.4.5 Accounts Receivable Turnover Ratio
13.4.6 Day Sales Outstanding
13.4.7 Cash Conversion Cycle
13.4.8 Capital Utilization Rate (CUR)
13.5 Solvency & Leverage
13.5.1 Debt-to-Equity Ratio (D/E)
13.5.2 Equity Ratio
13.5.3 Debt-to-Assets Ratio
13.5.4 Retained Equity
13.5.5 Interest Coverage Ratio
13.5.6 Operating Leverage Analysis
13.6 Valuation
13.6.1 Price-to-Earnings (P/E) Ratio
13.6.2 Price to Book (P/B) Ratio
13.6.3 Earnings Per Share (EPS)
13.6.4 Enterprise Value (EV)
13.7 Shareholder Value
13.7.1 Return on Investment (ROI) Metrics
13.7.2 Return on Investment (ROI)
13.7.3 Return on Assets (ROA)
13.7.4 Return on Equity (ROE)
13.7.5 Compound Annual Growth Rate (CAGR)
13.7.6 Breakeven Point (BEP)
13.7.7 Dividend Yield
13.7.8 Dividend Payout Ratio
13.7.9 Total Shareholder Return (TSR)
13.7.10 Economic Value Added (EVA)
13.8 Cash Flow
13.8.1 Cash Flow Adequacy
13.8.2 Free Cash Flow (FCF)
13.8.3 Operating Cash Flow (OCF)
13.8.4 Cash Flow to Debt Ratio
13.8.5 Days Payable Outstanding
13.8.6 Capital Expenditures (CapEx)
13.8.7 Capital Deployment Efficiency (CDE) Ratio
13.9 Risk & Credit Analysis
13.9.1 Altman Z-Score (Bankruptcy Prediction)
13.9.2 Credit Risk Score
13.9.3 Credit Spread.
13.9.4 Fixed Charge Coverage Ratio (FCCR)
13.9.5 Beta Coefficient (Stock Volatility)
13.9.6 Value at Risk (VaR)
13.9.7 Jensen’s Alpha (Portfolio Performance)
13.1 Reading a Business Balance Sheet
13.10.1 What is a Balance Sheet?
13.10.2 The Balance Sheet – Key Components
How to Read a Balance Sheet 508
13.10.3 Practical Steps to Understanding a Balance Sheet
13.10.4 Example Balance Sheet Breakdown
13.10.5 Conclusion

14 Metrics for Business Development
14.1 Ideation
14.2 Feasibility and Validation
14.2.1 PORTERS 5 Forces
14.2.2 PESTEL Analysis
14.3 Concept Development
14.3.1 Market Demand & Opportunity Analysis
14.3.2 Sales Forecasting in a Volatile or Turbulent Market
14.3.3 Serviceable Available Market (SAM):
14.4 Planning & Strategy Stage
14.5 Business Profile Summary
14.5.1 Definition of Business Stage for Measurement
14.5.2 Capital Requirement Forecast
14.5.3 Capital Sources Analysis
14.5.4 Environmental & Macro Factors
14.5.5 Final Output: Capital Availability Index (CAI)
14.6 Investment / Funding
14.7 Startup / Kick Off Stage
14.8 Growth Stage
14.8.1 Average Satisfaction Score
14.9 Maturity Stage
14.1 Expansion or Diversification
14.11 Exit or Flotation Stage
15 Investment Analysis
15.1 The Project Hypothesis
15.1.1 Market Scope
15.2 Business Feasibility Assessment (Gate 1)
15.2.1 Market Viability
15.2.2 Technical Feasibility
15.2.3 Operational Feasibility
15.2.4 Overall Business Feasibility Score
15.3 Stakeholder Alignment (Gate 2)
15.3.1 Strategic Fit with Investor/Fund Objectives
15.3.2 Leadership Strength and Governance
15.3.3 BRAT Score
15.3.4 Leadership Effectiveness
15.3.5 Scoring Methodology
15.3.6 Stakeholder & Strategic Alignment Report: Water Vita Ltd
15.4 Scenario Planning (Gate 3)
15.4.1 Stress Testing the Business Model
15.4.2 Sensitivity Analysis
15.4.3 Best / Worst / Base Case Planning
15.4.4 Scenario Planning: Water Vita Ltd – Water Vending Station Business
15.5 Financial Evaluation (Gate 4)
15.5.1 Financial Evaluation – Water Vita Ltd (WVS Case)
15.6 Risk Assessment (Gate 5)
15.6.1 Risk Matrix – Water Vending
15.7 Decision Criteria (Gate 6)
15.8 Final Investment Evaluation: (Gate 7)
15.9 Final Commentary (Gate 8)
16 Advanced Analytical Techniques
16.1 Predictive Modeling & Regression Analysis
16.1.1 Linear Regression
16.1.2 Logistic Regression
16.1.3 Example1: Employee Turnover Risk
16.1.4 Time Series Analysis
16.1.5 Time Series Analysis
16.1.6 ARIMA (Auto Regressive Integrated Moving Average)
16.1.7 Overview of ARIMA (Auto Regressive Integrated Moving Average)
16.2 Classification & Machine Learning Algorithms
16.2.1 Decision Trees
16.2.2 Decision Trees
16.2.3 Random Forests
16.2.4 Support Vector Machines (SVM)
16.2.5 Gradient Boosting Model (GBM)
16.2.6 Neural Networks
16.2.7 Neural Networks
16.2.8 Naive Bayes
16.2.9 Fuzzy Rough Nearest Neighbor (FRNN)
16.3 Discriminant Analysis & Dimensionality Reduction
16.3.1 Linear Discriminant Analysis
16.3.2 Quadratic Discriminant Analysis (QDA)
16.3.3 Multivariate Discriminant Analysis (MDA)
16.4 Clustering & Unsupervised Learning
16.4.1 Clustering (e.g., K-Means)
16.5 Model Performance Evaluation
16.5.1 AUROC (Area Under the Receiver Operating Characteristic Curve)
16.6 Monte Carlo Simulation
16.7 Supervised Learning Algorithms
17 Building Business Models
17.1 Development Process
17.2 Methodology for Building a Business Model
17.2.1 Define the Value Proposition
17.2.2 Identify the Market
17.2.3 Develop the Revenue Model
17.2.4 Establish the Cost Structure & Key Resources
17.2.5 Define Distribution Channels & Customer Relationships
17.2.6 Identify Key Partnerships & Alliances
17.2.7 Test, Validate, and Iterate
17.2.8 Scale and Optimize the Business Model
18 Summary & Conclusions
19 Glossaries
19.1 Standard Statistical Terms
19.1.1 Descriptive Analytics
19.1.2 Diagnostic Analytics
19.1.3 Predictive Analytics
19.1.4 Prescriptive Analytics
19.2 Data Visualisation Techniques
19.3 Graph types for Data Visualization
19.3.1 Deviation (Charts)
19.3.2 Correlation (Charts)
19.3.3 Ranking (Charts)
19.3.4 Distribution (Charts)
19.3.5 Temporal (Charts)
19.3.6 Magnitude (Charts)
19.3.7 Part to whole (Charts)
19.3.8 Spatial (Charts)
19.3.9 Flow (Charts)
Index of Formulas
Index of Figures
Index of Tables
Subject Index
References & Authorities

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