How do you know your company is financially fit? We all talk it to death: profit, profit, profit. And for good reason—your profitability, and therefore your profit margin, is the single best measure of company health. However, it is a mistake to think that is all there is to it. This article outlines a handful of other metrics you should be using to gauge company health.
When you’re examining customer profitability, there are two key methods where you can focus your efforts on growing: Increase the
The Rule of 40 is a SaaS-specific metric to track your company’s financial health. It combines your profitability and growth into a measure of health. Put simply, if your growth rate and profit margin total more than 40%, then you can assume your SaaS company is in a good financial position.
To apply for a business line of credit, a lender is going to want to know that your company is in good financial health. Additionally they will want to know what kind of collateral your business can offer to secure the line of credit. There are a few key accounting metrics that you should track: Your liquidity KPIs and your borrowing base calculation. (Includes borrowing base calculator)
Why should you care about your debt-to-equity ratio? Investors care about your liquidity (asset health) and solvency (debt health), and as a business owner, you should too. In financial metrics, that means tracking your current and quick ratio and your debt-to-equity ratio respectively. On the simplest terms, debt is what you owe, equity is what you own. Includes a debt-to-equity ratio calculator and infographic.
Congratulations, you have managed to persuade a customer to purchase your product or service. In fact, you have managed to repeat this action over and over again. But, do you know the true cost to acquiring those customers and have you figured out how to improve that cost?
We see measuring analytics as an essential tool to scale your business. And, if you are a loyal reader, you know we never go too long without writing about our beloved metrics. However, do you know which metrics are essential to your business and the stage of growth you are in? In this article, we provide a breakdown of some of the Key Performance Indicators (KPIs) for growth in common business models.
Why is Free Cash Flow (FCF) important for scaling companies? Simple. FCF enhances shareholder value and is an attractive metric for investors compared to price-earnings. Discover how you can easily calculate and build your company’s FCF.
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