Monthly Financial Analysis for Business Owners Menu

12 Key Financial Metrics for Businesses

The Business Ferret uses 12 key financial metrics to determine the health of publicly-traded or privately-held companies. These indicators give a complete, historic picture of financial health as well as an accurate prediction of future performance.

1 Real Revenue Growth

Real revenue growth analysis shows the real annual growth in revenues adjusted for the effect of annual over-all increases or decreases in the gross profit index.  More 

2 Sustainable Revenue Growth

Sustainable revenue growth tells us how much additional annual real revenue growth a business can handle according to the resources in the balance sheet.  More 

3 Pricing Policy and Pricing Index

A good pricing policy is simply about maintaining your gross profit margin. Maintaining that specific margin is part of your brand identity.  More 

4 Operating Expense Control

Operating expense control is management of the continuous financial obligations incurred in the daily operation of the business.  More 

5 Comparing EBITDA Versus Cash Flow

When it comes to measuring cash flow to your business don’t use EBITDA alone! Understand how useless EBITDA and compare EBITDA versus cash flow.  More 

6 Debt Free Cash Flow

Use your cash wisely! Sometimes, the right move is to use your cash flow to grow the business, not pay off debt. Your debt free cash flow will show you how.  More 

7 Excess Cash

Excess cash management can harm the company's performance in many ways. It’s not just having too little cash, it is also having too much.  More 

8 Return on Assets

Return on assets eliminates the effect of leverage when a business uses debt financing. ROA is highly useful in comparing one company to another.  More 

9 Negative Working Capital vs Postive Working Capital

Knowing the potential need for negative working capital (as well as positive and neutral) is important for determining the future financing of a business.  More 

10 Use of Debt Financing

Debt financing is often far cheaper than equity financing, even in the worst of times. Use of debt financing plays a big role in cost of capital as well.  More 

11 Net Trade Cycle

Net trade cycle calculates how many days and dollars are tied up in accounts receivable and inventory and furnished by the accounts payable.  More 

12 Cost of Capital

The cost of capital gives us a benchmark for improving the value of a company; the returns we get on our assets needs to beat the cost or we're in trouble.  More