What are the main financial metrics that businesses should monitor regularly to assess their financial health and make informed decisions?
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2 Answers
The main financial metrics that businesses should monitor regularly include revenue, profit margins, and cash flow.
Revenue is the total amount of income generated by the business, while profit margin is the percentage of revenue left over after all expenses are paid.
Cash flow is the amount of money flowing in and out of the business, indicating its ability to pay bills and make investments.
Revenue is the total amount of income generated by the business, while profit margin is the percentage of revenue left over after all expenses are paid.
Cash flow is the amount of money flowing in and out of the business, indicating its ability to pay bills and make investments.
Businesses should regularly monitor financial metrics such as revenue, net income, cash flow, gross profit margin, and return on investment (ROI) to assess their financial health and make informed decisions. Other important financial metrics include debt-to-equity ratio, current ratio, and inventory turnover. By tracking these metrics, businesses can make data-driven decisions to improve their financial performance and achieve long-term success.