Value-added analysis

Value-added analysis: Where and how does the organisation actually create new economic value?

Two organisations may have the same turnover but make completely different economic contributions. One may mainly resell externally produced goods, whilst the other may transform knowledge, labour, technology and capital into a new product or service. Total revenue does not reveal this difference. Profit alone does not reveal it either, as it depends on labour costs, depreciation, financing, tax treatment and other components that come into play after value has been created.

Value-added analysis answers a more precise question: what new economic value has been created within a specific organisation, activity, product, process, project, sector, region or supply chain, after deducting the value of the intermediate goods and services used.

SOLISFERADOME ANALYTICS carries out value-added analysis for companies and industries, public institutions, institutional and professional investors, and organisations. The service links accounting, management, production and statistical data to reveal the magnitude, structure, sources, distribution and sustainability of the value created.

The aim is not simply to declare a higher figure as an automatic success. The aim is to establish exactly what has been measured, according to which definition, which factors have influenced the result, what proportion is attributable to prices and what to actual volume, how the value is distributed, and whether the observed development is economically sustainable.

What is value added?

In the production approach, value added is the difference between the value of the goods and services produced and the value of the intermediate consumption used in their production.

Gross value added = output – intermediate consumption

Output is not necessarily equal to invoiced sales. Depending on the activity and the chosen methodological framework, it may include changes in finished goods and work in progress, output for own final use and other adjustments. Intermediate consumption covers goods and services that are transformed or fully utilised in the production process, such as materials, energy, transport, rent, repairs, external professional services and other relevant inputs.

Compensation of employees is not deducted as intermediate consumption in the standard value-added account. It forms part of the primary income generated in production. Consumption of fixed capital is also not deducted from gross value added, but is taken into account in the transition to net value added.

This definition is simple as an equation, but its application is not mechanical. It is necessary to specify the unit of analysis, the period, the price base, the scope of production, internal supplies, the treatment of stocks, subsidies, taxes and the sources used. Without these decisions, the same activity may yield different values that appear comparable but are not.

What is the difference between gross and net value added?

Gross value added includes the consumption of fixed capital. Net value added is obtained after deducting this.

Net value added = gross value added – consumption of fixed capital

The difference is significant in capital-intensive activities. An enterprise with a large fleet of machinery, infrastructure or an expensive technological base may report significant gross value added, but part of this is required to offset the economic wear and tear and obsolescence of capital.

Accounting depreciation and the consumption of fixed capital in the national accounts pursue related but not identical objectives and should not automatically be regarded as the same. Where the analysis is based on company accounts, the measure used and its deviation from the statistical concept are explicitly stated.

Within which methodological framework is value added measured?

There is no single, universal company-level formula for value added that can be applied unchanged to every situation. The indicator must be defined within a specific framework.

For national, regional and sectoral comparisons, the usual reference point is the System of National Accounts and the European System of Accounts. In these systems, gross value added at basic prices is defined as output at basic prices minus intermediate consumption at purchase prices.

In structural business statistics, indicators such as value added at factor cost may be used. These have specific statistical definitions and should not be mixed, without adjustment, with gross value added at basic prices.

In the management analysis of an enterprise, product, process or project, the official statistical logic may be adapted to the available accounting and operational data. In such cases, the formula, the items included and the allocation rules are documented, and the result is presented as a management estimate, not as an official statistical measurement.

In the case of public services provided free of charge or at economically insignificant prices, there is no observable market price for the output. In the national accounts, non-market output is usually valued at production cost. This allows for an accounting measurement, but does not demonstrate the quality, social utility or efficiency of the service.

Before the calculation, we determine which framework corresponds to the decision. Changing the framework midway through the analysis would alter the meaning of the indicator and render comparisons unreliable.

Value added is not turnover

Turnover shows the value of sales in accordance with the applicable accounting and statistical rules. It does not deduct the value created by other organisations and purchased as inputs. High turnover may coexist with low value added when a significant proportion of the sales value derives from resold goods, materials, energy, licensed content or external services.

The reverse is also possible: an organisation with a lower turnover may generate a higher relative share of value added if it uses knowledge, labour, technology and its own processes to transform limited intermediate consumption into a higher-value product.

The comparison is valid only under identical conditions and for comparable activities. A higher share of value added does not, in itself, prove a better business model.

Value added is not profit

Value added is the resource created in production prior to its distribution amongst labour, capital and the public sector, depending on the chosen framework. Under the income approach, gross value added at basic prices comprises compensation of employees, other taxes on production net of other subsidies, and gross operating surplus or mixed income. Consumption of fixed capital is included in the gross operating surplus or mixed income and is deducted when converting to a net measure; therefore, it should not be added a second time.

Consequently, an enterprise may generate positive and increasing value added, yet still have a low or negative profit if the costs of labour, capital, unused capacity, finance or other expenses are excessive in relation to the value added generated. It is also possible for profit to improve temporarily due to factors that do not imply higher value added in production.

The analysis does not treat value added and profit as synonyms. They address different issues and must be considered together when the decision depends on both economic contribution and financial sustainability.

Value added is not VAT

An economic concept of taxing the value added along the supply chain links the two concepts, but they are not the same thing. Value added tax is a legally defined indirect tax, which is usually administered through a chargeable and deductible tax credit. Economic value added is a production indicator. Exemptions, rates, the right to a tax credit, the territorial regime and other tax rules mean that the tax base and the VAT liability are not equal to the statistical or managerial value added.

This service does not constitute VAT calculation, declaration or advice. The tax treatment is determined by the applicable legislation and the specific transactions, whilst the economic analysis uses its own clearly described methodology.

Added value is not the market value of a business

The market or fair value of a business depends on expected future cash flows, risk, capital structure, assets, market conditions and the valuation method used. Value added measures production output over a specific period and scope. It does not automatically determine the price of a company, share, brand, patent or other asset.

The term ‘economic value added’ is also sometimes used to refer to measures of residual income after the cost of capital, known as EVA. This is a different corporate finance concept from gross value added. It is not automatically included in this service and should not be calculated without separately defined accounting adjustments, a capital base and the cost of capital.

Added value is not the subjective value to the customer

In marketing, the term ‘value added’ often refers to an additional benefit for the customer: better quality, convenience, trust, design, lower risk or time saved. This customer value may increase willingness to pay and influence price and demand, but it is not identical to gross value added in the production account.

A product may generate high perceived benefit without the firm retaining significant accounting or production value. The reverse is also possible. When a decision requires both economic and market analysis, the two types of value are measured using different data and methods and are only then linked.

What does the service include?

Measuring and reconciling added value

We determine output, intermediate consumption and the applicable adjustments for the agreed period and scope. We reconcile the calculation with accounting and management sources and document the discrepancies between the statistical definition and the available company data.

Where possible, the calculation is also verified using the components of income. Discrepancies between the production and income approaches are not concealed but are used to identify incompatible classifications, missing data or differing boundaries.

Analysis by product, service, project, process or unit

The total value of the organisation can be allocated to economically significant objects where sufficient data is available. The analysis can show which products, services, contracts, objects, processes, regions or units generate added value and which primarily pass on value created by external suppliers.

The allocation of total inputs involves a methodological choice. Where there is no direct causal link, the chosen allocation key is stated as an assumption, and the result can be verified using alternative allocation rules.

Decomposition of change over time

The change in value added is broken down, based on available data, into the effects of selling prices, input prices, physical volume, product mix, productivity, capacity utilisation, wastage, changes in stocks, outsourcing, vertical integration and other relevant factors.

This distinction is critical. Growth at current prices may be a nominal result of inflation, without a corresponding growth in real volume. To estimate at constant prices, output and intermediate consumption must be adjusted using appropriate price indices; simply dividing value added by a general index is often insufficient.

Labour and capital productivity

Value added per person employed, per full-time equivalent, per hour worked, per unit of capital, capacity or other relevant resource can be calculated. The choice of denominator depends on the decision being made and the data available.

Value added per person is an indicator of apparent productivity, rather than a pure measure of the individual’s contribution to labour. It is influenced by capital intensity, technology, working hours, skills, prices, product mix, capacity utilisation and the extent of outsourced activities. Therefore, comparisons between different sectors or business models without adjustments can be misleading.

Value Chain Analysis

The value chain is the sequence of activities and participants through which inputs are transformed into a product or service and reach their final use. Value added is the amount of value created at a particular stage. Value chain mapping and the measurement of value added are related, but they are not one and the same.

We track where along the chain production takes place, which intermediate inputs are purchased externally, which activities are carried out internally, and how value is distributed amongst the participants. The analysis may cover suppliers, manufacturing, logistics, distribution, services, software, data and other functions.

When aggregating along the chain, we avoid double counting. Summing the turnover of all participants repeatedly includes the value of the same intermediate product. Summing up the value added at each stage shows the new value created at each stage, provided that the boundaries and internal flows are correctly defined.

Analysis of outsourcing and vertical integration

We compare how in-house production, outsourcing, local suppliers, imports or changes to the contractual model affect value added, costs, quality, capacity, risk and control.

Outsourcing may mechanically reduce the client’s added value, as in-house labour and processes are replaced by an external intermediate service. This does not prove that the decision is economically poor. It may reduce costs, improve quality or free up capacity. Conversely, vertical integration may increase reported value added without necessarily increasing profit or efficiency. Therefore, ‘make or buy’ decisions cannot be assessed on the basis of a single coefficient.

Economic contribution of an investment, activity or policy

For a project, enterprise, sector or public measure, the direct contribution to value added, employment and income can be assessed. With sufficient data and an appropriate methodology, indirect effects via suppliers and induced effects via income and consumption can be considered.

The multiplier is not a natural constant. It depends on the ‘resource–use’ tables or input-output data used, the year, the geographical scope, the import content, spare capacity and the assumptions made. The gross effect is not equal to the net social effect if the resource would have been used elsewhere or if there are displacement effects, opportunity costs and negative externalities.

Sectoral, regional and comparative analysis

We compare value added, its share of output, the structure of intermediate consumption, productivity and trends across periods, regions, sectors or a selected group of similar organisations. We use comparable classifications, price bases and definitions.

Ranking is not an end in itself. Deviations from the average may be explained by capital intensity, size, stage of development, geographical environment, product specialisation, internal integration or accounting structure. The comparison is only meaningful when these differences are apparent.

Distribution and sustainability of value created

Where data permit, we analyse how the value created relates to compensation of employees, other taxes on production net of other subsidies, and the gross operating surplus or mixed income, depending on the chosen framework. When switching to net value added, consumption of fixed capital is separated from the gross operating surplus. This shows not only how much value has been created, but also what resources are required for labour remuneration, capital replacement, investment and sustainable development.

The allocation is not an automatic moral judgement. The normative conclusion requires additional criteria relating to fairness, competitiveness, legal admissibility, risk and long-term consequences.

What does the service expressly not include?

The service does not constitute an accountancy service, an independent financial audit, tax advice, VAT calculation, transfer pricing, a business or asset valuation, actuarial analysis, quantitative finance, portfolio management or investment advice.

The result is a management assessment calculated on the basis of the company data provided, and does not constitute or replace official statistics from the National Statistical Institute (NSI) or Eurostat.

The service does not automatically measure social value, well-being, quality of life, environmental impact, carbon footprint, human rights or any external effects. These outcomes may be the subject of a separate assessment using other indicators and evidence.

The analysis does not in itself prove causality. The accounting decomposition shows how the change is composed according to the definitions, but the causal question ‘what would have happened without the specific measure’ requires a counterfactual design and sufficient data.

Who is this service intended for?

Public institutions

The service supports the analysis of sectoral and regional contributions, productivity, economic structure, local content, the effects of public investment, industrial or regional policy, and the resource efficiency of public activities. For non-market services, the economic measure is supplemented by indicators of volume, quality, accessibility and social outcomes.

Companies and industry

It is suitable for enterprises, groups, manufacturing and service organisations that need to understand which products, processes, units and supplier relationships create value; how prices, volume and inputs affect the outcome; and how decisions regarding automation, capacity, product mix, outsourcing or vertical integration will play out.

Institutional and professional investors and organisations

The analysis can assist in assessing the business model, economic contribution, operational structure, dependence on external inputs and resilience of a portfolio company, project or sector. It does not constitute a personalised recommendation to trade in a financial instrument and does not automatically determine investment value or returns.

When might this service be required?

The analysis is particularly useful when an organisation is reporting growth in turnover but is unsure whether it is creating more value for itself; when costs for materials and external services are rising faster than output; when in-house production and outsourcing need to be compared; or when management needs to determine which products, processes and units merit additional capital.

It is also necessary when assessing the economic contribution of an investment, a business, a sector or a public policy measure; when examining local or national content; when comparing productivity across periods and organisations; or when nominal growth needs to be broken down into price and volume effects.

If a decision can be made reliably using a simpler indicator, a complex model is not required. The analysis should be as detailed as required by the magnitude of the risk, the irreversibility of the decision and the quality of the available data.

What decisions can the analysis support?

The results can assist in choosing a product and service mix, pricing, automation, investment in capacity, process reorganisation, supplier policy, in-house production or outsourcing, geographical location, local supply chain development, budgeting, remuneration, training, innovation and the prioritisation of public policy measures.

Added value is not the only criterion. The actual decision should also take into account profit, cash flow, risk, quality, timeframe, sustainability, legal constraints, competitiveness, distributional effects and the opportunity cost of resources.

What data is required?

The required data set is determined by the question and the unit of analysis. Typically, financial statements, trial balances, analytical accounting reports, data on revenue and output, purchases of materials, energy and external services, stocks and work in progress, labour costs, depreciation, taxes and subsidies.

For analysis by product, process or unit, the following are required: quantities, prices, technical standards, capacity utilisation, scrap, working hours, cost centres, internal transfers, allocation keys and a comparable organisational scope.

For sectoral, regional or chain analysis, national accounts, structural business statistics, ‘resource–use’ tables, input-output tables, foreign trade data, price indices, employment, hours worked, investment and capital stock.

For public services, in addition to expenditure, indicators of volume, coverage, quality, accessibility and outcomes are required. If such data are lacking, the analysis may measure reported resources but cannot reliably assess public effectiveness.

Before exchanging sensitive information, the minimum necessary volume, the legal basis, the format, the secure channel, the authorised users and the retention period are specified. Data is provided in aggregated or pseudonymised form where detail is not required for the purpose.

How do we work?

1. We define the subject, unit and scope

We formulate the specific question and determine whether the subject is an enterprise, a group, a product, a service, a process, a project, a sector, a region, a public activity or a supply chain. We specify the period, currency, geographical scope, organisational boundaries and reference date.

2. We select the definition and pricing basis

We determine whether the analysis uses gross or net value added, basic or other prices, and a national accounts, structural-statistical or management framework. We define output, intermediate consumption, internal supplies, stocks, taxes, subsidies and capital.

3. We check the origin and comparability of the data

We track the source, period, unit of measurement, accounting classification and any breaks in the series. We check for duplication, missing values, intra-group transactions, changes in accounting policy and discrepancies between financial and operational data.

4. We calculate the base value and reconcile it

We develop a transparent calculation of output, intermediate consumption and value added. Where the data permits, we reconcile the result with the components of income and document all adjustments and unexplained differences.

5. We break down the result by activities and factors

We decompose the value by product, process, unit, region or participant, and attribute changes to price, volume, mix, input costs, productivity, capacity, outsourcing and other factors. We do not present the residual difference as an explained cause if the data do not permit this.

6. We compare using common definitions

We carry out temporal, sectoral, regional or organisational benchmarking only after standardising boundaries, the price base, the period and the denominators. Differences are interpreted in relation to the business model, capital intensity and the supply chain structure.

7. We examine scenarios and management alternatives

Where applicable, we investigate how value added changes under different prices, volumes, product mix, suppliers, technologies, capacity or process organisation. A scenario is a hypothetical calculation, not a forecast that the specified conditions will occur.

8. We document the conclusions, limitations and rules for updating

We present the formulas, data, assumptions, results, alternative explanations and limits of applicability. We specify which indicators should be monitored and under what circumstances the analysis should be updated.

How does inflation affect the conclusion?

Value added at current prices may increase even when the physical volume does not increase. If selling prices rise faster than the prices of intermediate inputs, nominal value added may expand; if the opposite is true, it may contract, even with the same volume of output.

To analyse real trends, output and intermediate consumption must be examined separately in comparable prices. They often have different price structures, so the correct approach may require separate deflation. The conclusion that ‘productivity has increased’ does not follow solely from nominal growth.

How does outsourcing affect the indicator?

If an activity previously carried out by in-house staff is outsourced to an external supplier, the cost of that activity may shift from labour compensation to intermediate consumption. The contractor’s value added and the number of employees may both decrease, whilst value added per employee may even increase mechanically.

This does not prove a real improvement in productivity. Part of the activity and value has been shifted to another participant in the chain. To reach a correct conclusion, one must consider the total cost, quality, risk, dependency, flexibility, knowledge and value added across the entire relevant chain.

Can we determine exactly where value is created?

Accounting and operational data can pinpoint where output, intermediate consumption and inputs are recorded. This is necessary, but not always sufficient to draw a conclusion.

To claim that a specific technology, team, policy or supplier has caused the additional value, it is necessary to estimate the plausible outcome without it. Such a counterfactual question may require an experimental or quasi-experimental design, an econometric model or a careful comparison. Where this is not possible, we use the language of contribution, composition and dependence, rather than that of proven causality.

How is value added analysed in the case of a public service?

In the case of a non-market public service, higher expenditure may increase the measured value of output under the cost approach. An increase in intermediate inputs alone usually raises both output and intermediate consumption simultaneously and does not automatically increase value added. Higher labour costs or capital consumption may increase the measured value added, without this necessarily meaning that the service has become better, more accessible or more efficient. Expenditure is an input, whilst public benefit is an outcome that must be measured separately.

Therefore, the analysis of a public service links the economic account to indicators of quantity and quality, such as the number of people served, access times, coverage, reliability, and educational, health, administrative or infrastructure outcomes. When evaluating a policy, the distribution of benefits and costs, alternative uses of public resources and possible externalities are also considered.

What knowledge does the analysis generate?

Definitional and accounting knowledge

It establishes what the indicator means within the chosen framework and how it is derived from the specific data. The equality between output, intermediate consumption and value added is an accounting identity under the accepted definitions. It is verifiable but does not constitute an independent causal explanation.

Descriptive knowledge

It shows the size, structure and dynamics of value added by period, activity and component. It answers the questions ‘how much’, ‘where’ and ‘how it has changed’, but does not automatically explain ‘why’.

Comparative and diagnostic knowledge

It breaks down the difference in terms of prices, volumes, inputs, product mix, capacity and organisational structure, and compares the results using common definitions. Decomposition identifies the factors to which the change is accounting- or statistically-related. It can construct a well-founded hypothesis, but does not turn every association into a cause.

Causal knowledge

A causal conclusion requires a counterfactual: what added value would have been created without the investment, technology, policy or organisational change under analysis. Reliability depends on the research design, the data and the ability to rule out plausible alternative explanations.

Conditional knowledge

The scenario shows how the outcome would change if certain prices, volumes, technologies, suppliers or rules were to change. The validity of the conclusion is conditional on the input data and assumptions and does not prove the likelihood of the scenario occurring.

Normative conclusion

Higher added value does not automatically mean that a particular decision should be chosen. The normative recommendation depends on profit, risk, liquidity, quality, legal considerations, distributional consequences, environmental and social impacts, time and opportunity cost. The analysis makes these criteria explicit so that the choice is well-founded, rather than hidden behind a single figure.

Advantages of value-added analysis

The analysis distinguishes between the value created within the organisation and the value purchased from external suppliers. It shows why a rise in turnover may not lead to a higher economic contribution, where costs for intermediate inputs eat into the profit, and how products, processes and suppliers influence the value structure.

The indicator enables a more meaningful comparison of performance, the tracking of value chains without double-counting, and the assessment of the effects of automation, outsourcing, vertical integration and changes to the product mix.

For public institutions, the analysis can demonstrate the direct economic contribution and the structure of resources. For companies, it can link operational decisions to the ability to remunerate labour, recoup capital, make investments and achieve sustainable growth.

The greatest benefit lies not in maximising the indicator, but in clarifying the mechanism through which inputs are transformed into outcomes.

Limitations and potential drawbacks

The quality of the analysis depends on the boundaries and classifications. A shift between in-house activities and external services, intra-group pricing, mergers, demergers or different inventory rules may alter the indicator without a corresponding change in actual efficiency.

Company accounting data does not automatically correspond to national accounts. Sales may differ from output, accounting depreciation from the consumption of fixed capital, and taxes and subsidies may be presented on different price bases.

Nominal value combines price and volume. The per-employee indicator conflates labour, capital, technology, working hours and organisational scope. Sectoral benchmarks may be distorted by differences in product mix, capital intensity, size, region and stage of development.

Intangible outcomes such as knowledge, quality, sustainability, trust and public benefit may not be fully reflected. Negative externalities may remain outside the production account. Consequently, higher value added is not a sufficient condition for greater social welfare.

Models of indirect and induced contributions depend on historical structures and assumptions. They may overestimate the net effect if they fail to account for imports, capacity constraints, displacement, alternative use of resources and behavioural responses.

Is value-added analysis mandatory?

There is no universal rule making this specific analytical service mandatory for every company, organisation or public institution. Certain value-added data may be required as part of a statistical survey, a contract, a funding programme, a public procurement procedure, an investment procedure, an internal management system or a specific regulatory regime.

This does not mean that every management analysis fulfils the relevant formal requirement. The competent authority determines the acceptable methodology, format, period and evidence. The service does not replace a mandatory statistical declaration, audit, tax document, valuation or any other legally prescribed procedure.

Even where it is not formally mandatory, the analysis may be practically necessary when making a decision involving significant resources, long-term dependence on a supplier, a change in the production model, public investment or a claim of significant economic contribution.

What does the client receive?

The final product is specified in the individual contract. It typically includes an executive summary, a precisely formulated analytical question, a selected methodological framework, an analytical unit and period, a map of data sources, an assessment of data quality, calculations of output, intermediate consumption and value added, and reconciliation with the relevant accounting and statistical figures.

Depending on the scope, the deliverable may include an analysis by product, process, project, unit, region or participant in the chain; a breakdown of price, volume and structural effects; performance indicators; comparisons between periods or with a comparable reference group; a value chain map; scenarios; assessment of direct, indirect and induced effects; limitations and management conclusions.

Financial and operational indicators may be used to reconcile and interpret value added, but the service does not automatically include a detailed analysis of profitability, liquidity, working capital or a financial stress test. Sector and market data may be used for comparison and context, without this constituting a full sector or market analysis. Where these matters form a separate part of the decision, they are defined separately within the project scope.

How long does it take?

The timeframe depends on the unit of analysis, the number of periods, the availability of data, the need for coordination with the accounts department, the level of detail regarding products and processes, the presence of intra-group transactions, price adjustments, external statistical data and the complexity of the supply chain.

A preliminary assessment of the scope and data readiness may take between 5 and 10 working days. A focused analysis of a single organisation, activity or limited set of products, based on prepared data, usually requires between 15 and 30 working days. An analysis of a group, a complex production or supply chain, a sector, a region or a public policy measure using an input-output model, price adjustments and multiple sources may require between 30 and 60 or more working days.

The timeframe indicated is indicative and begins upon receipt of the necessary input data. Where information is obtained from external sources or under the Access to Public Information Act, or where data is incomplete or contradictory, the timeframe may be extended.

When is the analysis complete?

The analysis is complete not when the largest possible figure has been obtained, but when the issue under consideration has a traceable answer; the definition and boundaries are clear; output and intermediate consumption have been reconciled; price, volume and structural changes have been distinguished; significant constraints have been identified; and the result can be linked to a specific decision.

Every result has a reference date. A new technology, contract, supplier, price, product mix, accounting policy or statistical revision may alter the conclusion. Therefore, the analysis must include an update rule and monitoring indicators.

Do not start by asking ‘how high is our value added?’. Start by asking ‘what decision do we need to make, what value are we measuring, and against what realistic alternative are we evaluating it?’.

Frequently Asked Questions

What is value added in plain language?

It is the new economic value created by a given production activity. Under the standard production approach, it is the value of output minus the value of goods and services used as intermediate inputs.

Is it the same as turnover, profit or VAT?

No. Turnover measures sales; profit measures the financial result after certain income and expenses; and VAT is an indirect tax. Value added measures the new economic value created by production activity. The indicators are related but not interchangeable.

Who is the analysis intended for?

For businesses, groups, investors, industry organisations and public institutions that need to identify where value is created, which activities increase or decrease it, and how resources can be allocated more effectively. The specific method depends on the organisation, the sector and the decision at hand.

What decisions can it support?

The analysis can assist in choosing between in-house production and outsourcing, evaluating a product or project, prioritising investments, managing capacity and resources, formulating regional or sectoral policy, and tracking economic contributions. It improves the basis for decision-making, but does not make the decision on behalf of the client.

Can the analysis be carried out by product, service, project or unit?

Yes, where financial and operational data allow output and intermediate inputs to be attributed to the relevant object. Overhead costs are allocated according to a justified and transparent allocation key, and any material sensitivity to this choice is indicated.

What data is required, and is it possible to work solely with public sources?

Typically, financial statements, analytical accounting reports, revenue, output, purchases of materials and services, stock, labour, depreciation, taxes, subsidies, quantities, prices, capacity and organisational breakdowns. The exact minimum set of data is determined once the question has been formulated.

A limited sectoral, regional or external company analysis can be carried out if reliable public sources exist. Public financial statements rarely allow for precise analysis by product, process, supplier or internal unit. This limitation is explicitly stated and is not offset by apparent accuracy.

Does the analysis prove which measure caused the growth?

Not automatically. Decomposition shows the composition of the change, but causality requires a counterfactual assessment of what would have happened without the measure. If the data and design do not allow for this, the result is presented as a contribution, correlation or hypothesis, not as proven causality.

Does the analysis constitute an audit or a business valuation?

No. It does not determine the market or fair value of an enterprise and does not contain an auditor’s opinion or any other assurance engagement. These services have different scopes, standards and requirements.

Is the analysis mandatory?

Not as a universal service for every organisation. Data or calculations may be required by a statistical survey, a contract, a funding programme, a procedure or a special regime. A specific management analysis does not automatically fulfil an official obligation.

What exactly does the client receive?

The usual output includes a methodological framework, a data map and assessment, calculations of output, intermediate consumption and value added, a breakdown by agreed factors, comparisons, graphs, constraints and management conclusions. The format may be a report, a working model, a dashboard, a presentation or a technical appendix, depending on the quotation.

How long does it take and how is the price determined?

Assessing the issue and the data usually takes 5–10 working days. A focused analysis may take 15–30 working days, whilst a project covering a group, a complex supply chain, a sector, a region or a public policy measure may take 30–60 additional working days. The exact timeframe is determined following a review of sample data.

The price is determined on a case-by-case basis depending on the scope, the number of organisations, the time periods and analytical dimensions, the quality of the data, any necessary adjustments, external sources, scenarios, visualisation and subsequent updates. The client receives a quotation setting out specific deliverables, a timetable and a price.

How does the commissioning process begin?

The first step is a brief description of the analytical question, the organisation, the activity, the product, the process, project or other subject to be examined, the forthcoming management decision or action, the period under consideration, and the available financial, production and statistical data. SOLISFERADOME ANALYTICS then determines the appropriate methodological framework and unit of analysis, assesses feasibility and the necessary resources, and specifies the expected outcome, timetable and individual price.