How it works. Use figures for your last 12 months. The tool applies fixed, illustrative changes to sterling and to interest rates, one at a time and together, and separately tests a rise and fall in sales, and shows what they would do to your gross margin, operating profit, net profit after tax, interest cover and return on capital. They are examples, not forecasts. Your results are worked out in your browser. If you choose UK limited company, the financial figures you enter (not the what-if settings) are also sent anonymously and added to the Gregory Analytics UK Business Financial Health Index dataset. Nothing is collected for other business types.
See a worked example first
An illustrative UK limited company with turnover of £1,500,000, gross profit of £600,000 and overheads of £420,000. Use Try example figures to load these into the form.
Profitability
Operating margin 12.0%.
Net profit after tax £129,435.
Financial resilience
Interest cover 20.00 times.
Net debt 0.48 times EBITDA.
Current ratio 1.35 times.
Return on capital
ROIC 13.6% after tax.
If sterling were 10% weaker against the currencies you trade in and nothing else changed, net profit would move from £129,435 to £107,385 (−17.0%), and gross margin from 40.0% to 38.0%.
| Today's figures | Sales up 10% | Sales down 10% | Sterling 10% weaker | Sterling 15% weaker | Sterling 10% stronger | Rates up 1.5 points | Rates up 2.5 points | Sterling 10% weaker and rates up 1.5 points | |
|---|---|---|---|---|---|---|---|---|---|
| Gross margin | 40.0% | 40.0% | 40.0% | 38.0% | 36.8% | 41.6% | 40.0% | 40.0% | 38.0% |
| Operating profit | £180,000 | £240,000 | £120,000 | £150,000 | £132,353 | £204,545 | £180,000 | £180,000 | £150,000 |
| Operating margin | 12.0% | 14.5% | 8.9% | 10.0% | 8.8% | 13.6% | 12.0% | 12.0% | 10.0% |
| Interest | £9,000 | £9,000 | £9,000 | £9,000 | £9,000 | £9,000 | £11,250 | £12,750 | £11,250 |
| Profit before tax | £171,000 | £231,000 | £111,000 | £141,000 | £123,353 | £195,545 | £168,750 | £167,250 | £138,750 |
| Corporation tax | £41,565 | £57,465 | £25,665 | £33,615 | £28,939 | £48,070 | £40,969 | £40,571 | £33,019 |
| Net profit after tax | £129,435 | £173,535 | £85,335 | £107,385 | £94,414 | £147,476 | £127,781 | £126,679 | £105,731 |
| Change in net profit (£) | – | +£44,100 | −£44,100 | −£22,050 | −£35,021 | +£18,041 | −£1,654 | −£2,756 | −£23,704 |
| Change in net profit (%) | – | +34.1% | −34.1% | −17.0% | −27.1% | +13.9% | −1.3% | −2.1% | −18.3% |
| Interest cover | 20.00 times | 26.67 times | 13.33 times | 16.67 times | 14.71 times | 22.73 times | 16.00 times | 14.12 times | 13.33 times |
| EBITDA | £210,000 | £270,000 | £150,000 | £180,000 | £162,353 | £234,545 | £210,000 | £210,000 | £180,000 |
| Net debt to EBITDA | 0.48 times | 0.37 times | 0.67 times | 0.56 times | 0.62 times | 0.43 times | 0.48 times | 0.48 times | 0.56 times |
| Your ROIC (calculated from your figures) | 13.6% | 18.0% | 9.2% | 11.4% | 10.1% | 15.4% | 13.6% | 13.6% | 11.4% |
| Cover of loan payments | 4.62 times | 6.15 times | 3.08 times | 3.85 times | 3.39 times | 5.24 times | 4.36 times | 4.21 times | 3.64 times |
Results
- The scenarios are illustrations, not forecasts.
- The balance sheet is held at today's level in every scenario.
- The model does not simulate how management would respond.
- Contract terms and payment timing can change real results.
- The sales scenarios simplify how costs behave.
Swipe the table sideways to see every scenario →
These figures are an illustration based only on the numbers you entered. They treat overheads as fixed unless you set a share that moves with sales under the advanced settings, apply the changes in sterling and interest rates in full for a year, use a simple corporation tax calculation for a limited company or CIC (none for an LLP, charity, sole trader or partnership), and ignore contract terms and payment timing unless you entered them. The movements shown are fixed examples, not forecasts. This is not advice on borrowing, currency products or investments. Gregory Analytics is not authorised by the Financial Conduct Authority and does not recommend lenders or currency providers. Before acting, speak to your accountant, your lender or a regulated currency provider.
See your financial health scorecard Compare with your industry
How the numbers are worked out
- Sterling moves are not symmetrical. If sterling falls 10%, a cost you pay in dollars rises by 11.1% in pounds, not 10%. If sterling rises 10%, it falls by 9.1%. The scenarios are worded as moves in sterling for that reason.
- One move, both currencies. The tool applies the same change in sterling against the dollar and the euro, and to your foreign sales and foreign purchases together. Sales in foreign currency soften a weaker pound if you have them.
- Tax. Corporation tax is worked out on profit before tax at 19% up to £50,000, rising to 25% from £250,000 with marginal relief between. The £50,000 and £250,000 limits are divided by one plus the number of associated companies you enter under advanced settings (blank means none). It assumes no tax adjustments, and no tax is shown on a loss. For an LLP, charity, sole trader or partnership no tax is shown, because the members or owners are taxed individually, or a charity is not usually liable. Sole traders and other partnerships pay income tax instead and are not covered by this tool.
- Return on capital invested (ROIC) is operating profit after corporation tax divided by net assets (total equity) plus borrowing, leases and director loans, less cash. The tax is worked out on operating profit alone, before interest. It is not shown for an LLP, charity, sole trader or partnership. It uses the balance sheet figures you enter, held at today's level in every scenario. It is calculated only from the figures you enter and is indicative, not advice. It is a rough guide: a year-end balance sheet can differ from the average for the year, and owners' pay choices distort small companies. They are not shown when capital is zero, negative or very small. We do not calculate a cost of capital, because that depends on judgements only you and your advisers can make.
- Sales change. Sales are changed by the percentage you choose. The share of cost of sales that moves with sales changes by the same percentage, and the rest stays flat. The share of overheads that is not fixed also moves in step with sales. Interest, borrowing and balance sheet figures do not change, and no change in volume or price is assumed beyond what you enter.
- Cash conversion is cash generated from operations (before tax and interest paid) divided by EBITDA. Free cash flow is that cash less capital spending, tax paid and interest paid; free cash flow conversion divides it by EBITDA.
- Cash conversion cycle is debtor days plus stock days less creditor days. Debtor days are trade debtors divided by turnover, times 365. Stock days and creditor days divide stock and trade creditors by cost of sales (turnover less gross profit), times 365.
- Current ratio is current assets divided by current liabilities; the quick ratio takes stock out of current assets first. Borrowing due within a year is compared with your cash to show what may need repaying or refinancing.
- Staff costs are shown as a percentage of turnover and of gross profit, with cost and turnover per employee if you enter the number of employees.
- Forward contracts fix the rate on the share you enter, so that share does not move in the first year.
- Net debt to EBITDA is borrowing plus lease liabilities, less cash, divided by EBITDA (operating profit plus the depreciation and amortisation you enter). Cash and borrowing are held at today's level in every scenario. Director loans are not included. It is shown when you enter borrowing or leases; where cash covers them it shows net cash. Lenders set their own limits, so check your facility letter.
- Interest. The rate scenarios add 1.5 and 2.5 percentage points to the variable share of your borrowing. Interest cover is operating profit divided by interest. Lenders set their own minimum levels for this measure in their loan agreements, so check your facility letter. Cover of loan payments divides operating profit by interest plus the capital you repay, and is a simple proxy because it does not add back depreciation.
- Break-even turnover is overheads divided by gross margin. It treats overheads as fixed and cost of sales as moving with turnover, which is a simplification.
- Price rises. If you enter a share you could pass on, the table includes the extra income from it once prices catch up, and shows the cash absorbed before then (cost increase multiplied by the months of delay, divided by 12).
Want these numbers month by month?
A business cash flow forecast shows the low point, the 13-week view and the effect of each change on your cash. Fixed fee, from £649.
Business cash flow forecastsBusiness loan review