Meet our company financials database’s latest benchmarking feature

Article – January 2022 | RoyaltyRange

As a RoyaltyRange customer, you can now enjoy access to a new feature of our company financials database: a tool that enables you to carry out benchmarking studies for profit-based transfer pricing (including, for example, TNMM, net cost plus, and Berry ratio methods) – quickly, accurately, and stress-free.

With our new benchmarking feature, anyone performing profit-based transfer pricing analyses can now get even more value from our company financials database. Not only will you save time and get more accurate results, but you’ll also receive a comprehensive benchmarking study report in Excel format, ready to share with the relevant tax authorities.

What is the new feature?

If you need to perform accurate benchmarking studies as part of profit-based transfer pricing analyses, the latest feature we’ve added to our company financials database could transform your approach and results.

With the new benchmarking tool, you can conduct benchmarking studies conveniently online, streamline your process, and reduce the risk of error.

Kris Rudzika, Managing Partner at RoyaltyRange, says: “When you’re performing benchmarking studies for profit-based transfer pricing, you need reliable data information at your fingertips and tools that save you both time and effort. With our latest feature, we’ve made sure our customers have access to the best tools and data out there for these tasks.”

“While, previously, our benchmarking tool was designed specifically for royalty rates, now we’ve expanded it and added it as a new feature to our company financials database – meaning our clients get even more value out of their subscription.”

How can you access the new feature?

The benchmarking tool is a new feature available to all customers who subscribe to our company financials database. By adding the new benchmarking tool to the package, we can now offer our customers everything they need for profit-based transfer pricing analysis, all in one place.

When you use the benchmarking tool, you receive an Excel report ready to share with tax authorities, providing a detailed, step-by-step breakdown of how the benchmark study was carried out.

How to use the new benchmarking tool

You can get automatic access to the new RoyaltyRange benchmarking tool feature by subscribing to our company financials database. And if you’re already subscribed, you can start using it right away.

This means that, as well as getting access to detailed company financials such as P&L, balance sheets and financial ratios, and company information such as direct and indirect ownership, addresses, descriptions, and inventories, you can now perform effortless benchmarking studies – all online and in a few easy steps.

Step 1: Apply your search criteria

The search parameters you apply determine the initial set of potentially relevant companies you can select to use in your analysis.

Step 2: Accept or reject your comparables

Using the tool, you can reject companies and indicate why they are not relevant comparables. The tool prompts you with the most common rejection criteria, for example: reasonable doubt regarding company independence, insufficient information (website unavailable or uninformative), significant difference in functions, and significant difference in products.

Step 3: Make your arm’s length price calculation

Choose your calculation method, from options including pooled variance or weighted average, net cost plus, EBIT margin, gross profit mark-up, and Berry ratio. The tool automatically does the rest for you.

Step 4: Generate your benchmarking study report

With the tool, you can generate a report that includes a detailed breakdown of the key steps in an Excel spreadsheet, which you can share with the relevant tax authorities to showcase your findings. The report includes:

  • Details of the search strategy you applied
  • An acceptance/rejection matrix showing which of the potentially relevant companies you selected for calculation purposes and which you rejected, along with your reasons
  • Your arm’s length price calculation and details of the calculation method applied

Your benchmarking study report also includes additional information about each company, such as its current and historical ownership structure, shareholding and beneficial owner information, financials, ratios, and branches.

Learn more about how our company financials database can improve your transfer pricing process here or get in touch to arrange a free demo at a time to suit you.

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