Financial analytics provide different views on the business financial data. It provides a wealth of information to continuously monitor the business performance and take strategic decisions . Financial analytics performance indicator metrics can showcase the status of business to the management. It plays a crucial role in improving cash flow & business profit. It helps you answer relevant business questions while letting your forecast the future of your business.
- Today’s businesses require timely information
- Every company needs prudent financial planning and forecasting
- In financial analytics traditional needs meet technology
- Financial Analytics provide update information for quick and right decision making
- Performance Indicator Info graphics provide dynamic and visual reports
Financial Performance Indicators
Cash On Hand
Cash In Hand
Cash In Hand is the total amount of cash available with the company at the end of every month. This shows whether there is sufficient cash available to run the business without external borrowing and what is the amount of Cash generated .
Gross Margin is the difference between Net Sales and Cost Of Good Sold. It indicates whether the product/ services pricing is correct to make the business generate money.
Earnings Before Depreciation, Interest , Tax & Amortization – EBITDA – is the Performance Indicator which depicts the sustainability of business. Is the business creating value for its shareholders or is it loosing money. EBIDTA is the difference of the Gross margin with the Operating Expense – OPEX.
This financial KPI total sales revenue after commercial tax. This this the top line of the business. It is the total of all sales billing minus the taxes paid to the govt. This PI info graphic clearly shows the business growth – positive or negative
Opex or Operating Expense is the total of the expenses, mostly fixed for running the business. Every business manager should have a close watch on this PI and compare it with Net Sales to check the effectiveness of your operations.
Receivables > 60 Days
Receivables limit growth. The more receivables you have , you will need more cash to grow. It is prudent to keep the receivables to the minimum. Any receivables over 60 days have a good chance of becoming an NPA. Hence to be tracked and monitored closely.
Opposite to the receivables, the Payables PI indicates the sum that a business owes to suppliers, banks, and creditors. It can be broken down by business departments, divisions, and projects, to have a more detailed overview of payables list.
The Inventory held by the business is a direct reflection of the procurement efficiency. Inventory is cash and should be held as minimum as possible. This normally calculated in Value or in Number of days.
The Current ratio is the liquidity ratio that measures whther a firm has enough resources to meet the short term obligations. It compares a firm’s current assets with its current liabilities. The current ratio is an indication of its liquidity
The quick ratio or acid test ratio is a PI for liquidity. It measures the ability of a company to use its quick assets (near cash assets) to extinguish or retire its current liabilities immediately. It is defined as the ratio between quickly available or liquid assets to current liabilities. Quick Assets are those assets that can be quickly converted to cash at close to their book values.