Скачать или смотреть The 5 Key Financial Indicators Business Execs Should Be Paying Attention To

The 5 Key Financial Indicators Business Execs Should Be Paying Attention To
Navigating a business through the challenges of growth can be both exciting and worrisome. With many gears in place, it’s hard to keep a close eye on all the moving parts. Here is our recommendation for the top 5 financial indicators that your business should be monitoring.
• Gross Margins
• Accounts Receivable (A/R)
• Accounts Payable (A/P)
• Inventory Turns, and
• Retained Earnings
The Gross Margins are the difference between the sales price and the cost of goods sold. Different industries have different percent margins, but on average, a business should have Gross Margins of 15% or more.
Accounts Receivables are completed sales that have open invoices awaiting to be paid. For some industries, if A/R is not turning within 15 days, it may indicate an issue; yet in other industries a 30-60 day turnover for A/R is normal. If you find yourself with all your cash flow held up in A/R there are financing solutions available through invoice factoring companies like Universal Funding.
Accounts Payable represents the credit given by your vendors and obligates you to pay the short-term debt. This is an important number to keep your eye on as it can affect your cash flow. As a general rule you want your A/P to be less than 50% of your A/R.

Inventory turns are another key indicator that should be reviewed on a monthly basis. Turns of at least 4 times a year on your inventory should be achieved. If cash flow is keeping you from achieving your inventory goals, invoice factoring can be a fast solution to increase inventory turns.

Retained Earnings are the excess profit that your business makes during the year and puts back into the business to build its working capital base. The benefit of this objective is that you are creating a historical precedent of profitability year after year.

When these 5 financial indicators are monitored and managed correctly, you can anticipate a positive affect in shaping the future growth of your business. If you find yourself in a cash flow pinch while managing these indicators, let Universal Funding provide some relief. Call us at 1-800-405-6035 or visit universalfunding.com today.
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