There are several key figures to keep in mind that allow you to take stock of your business’ financial health - as well as its profitability. And, to avoid the hassle of calculating these figures every time you need them, you can build out a dashboard that automatically does the work for you. That way, you have a real-time view of your data, with minimal effort.
Here are some basic management principles you ought to know:
- Working capital (le besoin en fonds de roulement or BFR): this is the difference between the influx and outflux of company cashflow. In other words, it is the liquid capital a company has at its disposal to operate.
- Net treasury: Net treasury is the total value of available funds in a company’s accounts once short-term costs and expenses have been settled. The state of your treasury is a primary indicator of the overall financial health of your company.
- Net income: this is the sum that remains after all the expenses (including any taxes paid by the company) are deducted from the revenue produced by a business, i.e. its actual monetary gains.
- Gross profit margin: this is the difference between the sales price of goods or services and the cost price. This is a helpful indicator of whether or not the good or service is well-priced.
Of course, there are plenty of other figures out there you could monitor. But it’s up to you to determine which are the most relevant for your business.
