10 Financial Numbers Every Business Owner Should Know

How well do you really know your business?

Try this test.

Can you identify these 10 financial numbers without spending hours searching for them?

1. Revenue

How much income is your business generating?

Track revenue over time rather than looking at a single period in isolation.

2. Gross Profit

How much remains after the direct costs associated with delivering your products or services?

3. Gross Margin

Gross margin puts gross profit into percentage terms and can help you evaluate trends as the business changes.

4. Net Profit

After accounting for applicable business expenses, what is the bottom-line financial result?

Growing revenue isn't nearly as exciting if profit keeps shrinking.

5. Net Profit Margin

Understanding profit as a percentage of revenue can provide another way to monitor financial performance.

6. Cash Balance

Yes, your bank balance matters.

It simply shouldn't be the only number you monitor.

7. Accounts Receivable

How much money do customers owe your company?

More importantly, how old are those receivables?

8. Accounts Payable

What does your business owe vendors and other parties?

Understanding upcoming obligations is critical when evaluating cash.

9. Monthly Operating Expenses

Approximately how much does it cost to operate your company each month?

Knowing this number can help with budgeting, reserves and planning.

10. Cash Flow

How is cash actually moving through your business?

A company can generate profit and still experience cash-flow challenges.

Turn Numbers Into Decisions

Knowing these numbers isn't about becoming an accountant.

It's about becoming a more informed business owner.

When considering another employee, new equipment, a larger marketing investment or expansion, these numbers can provide important context.

That's why bookkeeping should be viewed as more than transaction categorization.

SBC Bookkeeping & Consulting provides monthly Bookkeeping & Consulting designed to give business owners accurate financial information and experienced support.

Depending on the needs of your business, that relationship may include bookkeeping, reconciliation, financial statements, QuickBooks support, budgeting, forecasting, cash-flow analysis and profitability analysis.

Better bookkeeping gives you better information.

Better information can help you make better decisions.

How many of these 10 numbers can you confidently answer today?

If the answer isn't enough, SBC Bookkeeping & Consulting can help.