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Advanced Financial Analysis — Benford, Functional Balance Sheet and BFR
BAOBIZEZAdvanced Financial Analysis
Financial health of the Enterprise
Three additional modules — Benford Act, Functional Review, BFR Analysis — with comparison N/N-1 over two exercises. Import your two FEC files and get a structured diagnosis with evolution of indicators.
Method and purpose of analysis
This module operates two FEC files, one for exercise N-1 and the other for the financial year N, in order to produce a comparative reading of the financial health of the company. The scan is done locally in the browser: files are not transmitted to a server.
The tool crosses three complementary angles: the statistical quality of the entries with Benford's law, Financial structure with the functional review, and the control of the operating cycle
with analysis of the BFR, customer deadlines, suppliers and stocks.
1. Import both CEFs
Load the file from the previous fiscal year, then from the current fiscal year.
2. Launch Analysis
The module automatically calculates indicators and deviations N/N-1.
3. Using the report
Check the tabs, then generate a PDF summary report.
N-1
Previous year
No file loaded
⚠️ Do not drag and drop
N
Current year
No file loaded
⚠️ Do not drag and drop
Displaying amounts v7
Choose the display unit used in tables, indicators, charts and reports. The choice may be modified before or after treatment.
Import both FEC files to start the comparative processing.
Comparative analysis N/N-1 underway...
📐 The Benford Act — principle and usefulness
The Benford Act states that in any set of natural financial data, the first significant figure follows a logarithmic distribution: the number 1 appears ~30.1% of time, 2 ~17.6%, up to 9 (~4.6%. This distribution is universal in authentic accounting data.
A significant difference between the observed distribution and the theoretical distribution may indicate a fraud, artificial seizures or systematic errors. The N/N-1 comparison detects whether data quality has deteriorated from one exercise to another.
Instructions for use: The tool analyses all amounts > 0 of the two CEFs. The score MAD (Mean Absolute Deviation) synthesizes global compliance. A DAM 0.012 is suspect.
Global MAD score
|observed - expected| / 9
Average deviation on 9 digits. Synthetic compliance indicator at Benford.
Compliant: < 0.006
Acceptable: 0.006–0.012
Suspect: > 0.012
Absolute difference per digit
|observed frequency - log10(1+1/d)|
Difference between actual and theoretical frequency. A deviation > 1,5 % triggers an alert on the relevant figure.
Alert: deviation > 1.5 per cent
Z score per digit
(observed - expected) /
Measure the statistical significance of the gap. |Z| > 1.96 = significant at the 5% threshold.
Meaning: |Z| > 1.96
Evolution MAD N-1 → N
MAD(N) - MAD(N-1)
Measurement if compliance improves or deteriorates from one exercise to another. An increase in DAM must be investigated.
Vigilance : MAD growing
Over-represented
observed > expected + threshold
Abnormally frequent figures. May reveal amounts manufactured around a target value or authorisation thresholds.
Potential fraud alert
Underrepresented figures
observed < expected - threshold
Abnormally rare figures. May indicate targeted write deletions or systematic input bias.
Alert possible deletion
Comparative results N-1 / N
Distribution N-1 vs. Benford
Distribution N vs Benford
Absolute deviations per digit — N-1 vs N
Detailed table — comparison number by number
Figure
Waited for Benford
N-1 observed
N-1 deviation
N-1 Z
N observed
N difference
NZ
Developments
⚠️ Limit: Benford's law applies reliably to data sets of at least 300–500. It is less relevant to homogeneous data (fixed wages, recurrent rents). A gap guides the investigation — it does not constitute proof of fraud.
🏦 The Functional Review — reading and usefulness
The functional review classified balance sheet items according to economic function (not their maturity): stable employment vs. stable resources on the one hand, assets and liabilities on the other hand. It ensures that the financial structure complies with the gold rule Sustainable jobs must be financed from sustainable resources.
The N/N-1 comparison shows thechanges in financial soundness : increase in equity, changes in debt, tension or relaxation of the FRNG, worsening or improvement of the BFR.
Instructions for use: The tool reconstructs the balance sheet since the cumulative balances of the EIF. It calculates FRNG, BFR and Nette Treasury for both years, with the structural ratios.
FRNG — Global Net Bearing Fund
Stable resources - Stable employment
Excess of sustainable resources over sustainable jobs. Long-term financial security margin available to finance the operating cycle.
Sound: FRNG > 0
Risk: FRNG < 0
BFR — Need for Rolling Fund
Active circulating exploit. - Passive operating profit.
Need for cycle financing (inventories + receivables - supplier debts). Must be covered by the FRNG. A growing BFR indicates a deterioration of the cycle.
Monitor: BFR growing
Ideal: BFR < FRNG
Cash Nette = FRNG - BFR
Active Treasury - Passive Treasury
Residual balance. Positive = surplus liquidity. Negative = use of short bank competitions. The evolution N-1 → N indicates the liquidity trend.
Healthy : Treso > 0
Voltage: Treso < 0
Comparative results N-1 / N
FRNG — BFR — Treasury Neck : N-1 vs N
Structure Jobs / Resources : N-1 vs N
Table of comparative functional balance sheet
Financial structure ratios
📌 Note: The functional balance sheet has been reconstituted since the EIF balances. Accumulated depreciation may be partially reflected according to the quality of the CEE. For a certified balance sheet, consult the accountant.
🔄 Analysis of the BFR — measuring and piloting the operating cycle
The BFR (Need in Rolling Fund) measures the gap between receipts and disbursements of the operating cycle. A company that sells on credit and stores before paying creates a need for permanent financing that must be absorbed by cash.
The comparison N/N-1 is essential A growing BFR indicates a deterioration in the cycle (customers who pay later, stocks that are increasing, suppliers that are reducing their deadlines). The time limits in days (DSO, DPO, DIO) allow a standard reading independent of the size of the enterprise.
Key equation: BFR in days = DSO + DIO - DPO. Reducing this balance directly improves cash flow without requiring external funding.
DSO — Average customer time
Claims 411 / CA × 365
Average days of settlement by customers. An increasing DSO indicates an increase in credit or recovery difficulties.
Target: < 45 days
Risk: > 90 days
DIO — Time limit for rotation of stocks
Stocks 3xx / Purchases × 365
Average storage days. A growing IOD indicates increased immobilization — risk of obsolescence and overstocking.
Monitor trend
Alert: increase > 20%
DPO — Average supplier time
Debt 401 / Purchases × 365
Average settlement days suppliers. High DPO reduces BFR — but pay attention to legal deadlines and commercial reputation.
Ideal : DPO > DSO
Legal limit: 60 days
BFR in days of CA
BFR / CA × 365
Express BFR in days of CA — standard indicator for sectoral and inter-annual comparison. This is the main KPI of the cycle.
Target: < 30 days
Risk: > 60 days
Change in BFR N-1 → N
BFR(N) - BFR(N-1)
Absolute evolution of the BFR. Positive = increased need for funding. Negative = improvement. Most important sign of benchmarking.
Monitor: change > +20 %
Ratio BFR / FRNG
BFR Φ FRNG × 100
Share of working capital absorbed by cycle. Over 100 % = BFR exceeds FRNG — structural cash flow.
Healthy: < 80 per cent
Critical: > 100%
Comparative results N-1 / N
BFR components — N-1 vs N
Rotation times (days)
Total BFR N-1 vs N
Comparative BFR summary table
📌 Limits: Time limits are calculated on cumulative balances. For an infra-annual analysis, average balances would be more representative. Non-balance sheet liabilities (leasing, factoring) are not taken into account.
📄 Full PDF Report — what it contains
The report generates a 5 pages professional document taking the entire analysis together with the calculated data, the captured graphs and the detailed explanations of each concept. It opens in a new window — Save it in PDF via your browser's print dialog.
🔒 Confidentiality: The report is generated locally in your browser. No data is transmitted to an external server. The document is yours.
📋
Page 1 — Coverage
Executive summary with the 6 key KPIs, identification of the company and the period analysed.
📐
Page 2 — Benford Act
Explanation of the law, comparative MAD scores N-1/N, distribution charts, interpretation.
Definitions DSO/DIO/DPO, comparative table of deadlines, graphs, degradation alerts.
📝
Page 5 — Conclusions
Summary of the financial situation, priority vigilance points, recommendations for action.
✍️
Footer on each page
« Developed with BAOBIZZ · baobizz.com · SYSCOHADA revised 2017 · Generation date »
In the print dialog → choose « Save as PDF » as a destination
💡 Tip: For a better PDF rendering, in the print box enable the option « Background Graphs » (or « Background Colors and Images »). Choose the A4 format in portrait. The charts have been captured since the current analysis.
