Diagnostic Tool
Business Fragility Index
This diagnostic aggregates four structural risk dimensions (customer concentration, supplier dependency, working capital cycle length, and fixed cost exposure) into a composite fragility score. The score indicates how structurally vulnerable the business is to external shocks and internal performance variation.
Fragility in a business context is not simply about whether performance is good or bad today. A business can be performing well on current metrics while carrying a structural profile that makes it highly sensitive to a single adverse event. A concentrated customer base, a dominant supplier, long cash conversion cycles, and high fixed costs can each be managed individually in good conditions. Under stress, they interact and compound.
Understanding composite fragility matters because it separates operational performance from structural resilience. A business with strong current margins but high fragility is more exposed to discontinuous risk than its income statement suggests. The index identifies the specific dimensions driving fragility so that structural improvements can be prioritised.
Customer concentration
Percentage of total annual revenue from the largest customer.
Combined revenue percentage from the three largest customers.
Supplier dependency
Largest supplier's share of total cost of goods sold.
Combined COGS percentage from the three largest suppliers.
Working capital and cash conversion
Average days to collect receivables from customers.
Average days to pay suppliers.
Average days of inventory held. Enter 0 if not applicable.
Cost structure and margin
Overhead and fixed costs as a share of total revenue.
Current gross profit as a percentage of revenue.
Current operating profit as a percentage of revenue.
Many of the inputs requested by this diagnostic are metrics that disciplined operators typically monitor through internal management reporting. If a number requested here is not immediately available it often indicates that the current reporting structure does not isolate that metric clearly. Businesses operating with strong financial visibility normally track these figures regularly because they influence pricing decisions, supplier negotiations, operational planning, capital allocation, and risk management. Part of the work performed by MJB Strategic often involves helping companies design internal reporting structures that surface these metrics consistently so management can make better operational decisions.