Business performance and investment analysis options
Profit is paramount to business success and sustainability.
- It is important to regularly measure business performance to ensure you are generating worthy returns.
- EBIT yield (earnings before interest and tax) is a preferred measure of business performance.
- Aim for an EBIT yield of at least 6–8% excluding capital growth.
- It is important to undertake due diligence on investment options to ensure they are worth pursuing.
- Due diligence can include a simple cost benefit analysis, an EBIT yield analysis or internal rate of return analysis.
Michael Ryan, Booth Associates, Griffith
IREC Farmers’ Newsletter – Large Area No. 193: Spring 2015. Read the full newsletter here.