![]() The trouble, however, is that there are a lot of these metrics. In other words, a financial metric is any metric that provides insight into your company’s financial health. equity (a/k/a debt to equity ratio) and how efficient is your usage of the company’s capital? Debt and Equity – What is your balance of debt vs.Assets and Liabilities – How much cash (working capital) do you have and how long will it last, given your obligations and growth plans? If necessary, what can you do to increase cash flow?.Costs – What costs must you incur to run a successful business? And how do those costs affect your overall financial performance (gross profit margin, operating margin, and net profit margin)?.Revenues – What are the sources of income for your business, how do they ebb and flow over time, and what can you do about it?.Therefore, there is often some overlap between financial metrics and other departmental metrics because the finance team is responsible for measuring and managing anything that affects the following: For the CEO, however, such detail can become overwhelming when all you want to know is whether your company is financially viable and on track for sustainable, long-term growth.įinancial metrics aim to answer this question for all aspects of your business, including your finance and accounting function. And each department within your organization will measure their team’s performance differently. There are hundreds of metrics one can use to gauge success. ![]() ![]() Still, there are some key financial metrics and KPIs that every CEO should know, so in this post, we will discuss those metrics and how they can vary by industry or stage of growth.īut first, let’s clarify the terminology. As a fractional CFO, my job is to guide this effort – to narrow your focus to the most critical metrics and to offer strategic advice so you can make decisions. Yet, the methods for doing so are rarely straightforward. As the CEO of a growing company, you know it is crucial to track the health of your business.
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