Help Manual


Sigma Magic Help Version 17

Financial Benefits


The Financial Benefits Report tool can be used to document the quantifiable financial benefits realized on projects. Quantifiable financial benefits are classified into two categories: impact on Net Income or Earnings and impact on Balance Sheet.

This tool can be added to your active workbook by clicking on Project and then selecting Financial Benefits.


Click on Analysis Setup to open the menu options for this tool.


A sample screenshot of the setup menu is shown below.
Analysis Type: Specify the tool format for this analysis. This selection is not enabled since there is only one format available.
Monetary Units: Specify the currency to use for this analysis. The following options are available:
$Use the USD currency
Use the Euro currency
RsUse the Rupees currency
View Example: Click on this button to open the example file. You can view the example to get an idea of how to fill out this tool, or you can use the example as a starting point and modify it to meet your project needs.
Help Button: Click on this button to open the help file on this topic.
Cancel Button: Click on this button to exit without saving any changes.
Create Button: Click on this button to save changes and update the worksheet. You can go to the worksheet and enter the requested details.
OK Button: Click on this button to save changes and update your analysis results.


Enter the following information in the worksheet:
  • Enter any incremental revenue you have realized from your project.
  • Enter the overall average gross margin % for the products/services related to your project.
  • Enter any costs incurred on the project (do not include sunk costs)
  • Enter any impact on assets due to your project (such as reduction in inventories).
  • Enter any impact on liabilities due to your project
  • Add an effective date for each row to indicate when the benefits are expected to be realized.
  • Add comments describing the logic behind the numbers entered.
  • For the soft benefits, indicate the potential savings in cost avoidance (such as penalty avoidance), opportunity costs, and capacity increase.
  • For other non-quantifiable benefits where you cannot estimate financial numbers, add the comments at the bottom of the report.


If you click the Verify button, the software will perform some checks on the data you entered. A sample screenshot of the dialog box is shown in the figure below. Verify The software checks if you have correctly specified the input options and entered the required data on the worksheet. The results of the analysis checks are listed on the right. If the checks are passed, they are shown as green-colored checkmarks. If the verification checks fail, they are shown as a red-colored cross. If the verification checks result in a warning, they are shown in the orange exclamation mark, and finally, any checks that are required to be performed by the user are shown as blue info icons.
Item: The left-hand side shows the major tabs and the items checked within each section
Status: The right-hand side shows the status of the checks.
Overall Status: The overall status of all the checks for the given analysis is shown here. The overall status check shows a green thumps-up sign if everything is okay and a red thumps-down sign if any checks have not passed. Note that you cannot proceed with generating analysis results for some analyses if the overall status is not okay.


Click on Compute Outputs to update the output calculations. The analysis results calculate the impact on net income and the impact on the balance sheet. Financial Benefits Example A sample output message that is displayed on successful completion of the analysis is shown below. Financial Benefits Outputs The report summarizes the total savings from the income statement and the balance sheet. Once this sheet has been completed, forward this report to your designated financial controller and get their signature.


Here are a few pointers regarding this analysis:
  • Per Six Sigma guidelines, only the first year of benefits can be usually claimed. Hence, this form supports reporting benefits for one year only.
  • Currently, this tool does not support NPV calculation.


The following examples are in the Examples folder.
  • Use the Benefits Report to document the benefits of a project that improves the delivery performance (Benefits 1.xlsx).

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