Which indicators of my company’s financial performance should I be tracking? Should I calculate these key indicators, or should I ask my accountant to do it?

Usually, financial performance metrics such as sales revenue are typically available quicker as end-of-quarter or end-of-month numbers. How often you track indicators of your company’s financial performance also depends how quickly or readily available the information is.

The following indicators should be monitored carefully:

  • Gross profit margin – what percentage of revenue is left after subtracting cost of goods sold
  • Current ratio – helps you understand whether the business can pay its short-term obligations with its current assets and liabilities
  • Working capital – cash that is immediately available which can be used to fund day-to-day activities
  • Current assets subtracting current liabilities
  • Total asset turnover – measures how efficiently a company uses its assets to generate revenue. The higher the turnover the better the company performance
  • Operating cash flow – Measure of how much cash business has from business operations