Financial metrics and ratios offer business owners and executives a way to evaluate their company’s performance. Keep reading to learn the top common financial management mistakes, the 5 types of key financial metrics for growing companies, and how to measure the financial health of your business.
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Statistics suggest that 50 percent of new businesses will fail within their first five years of operation, and a whopping 70 percent will not last 10 years. While there are many challenges businesses must overcome as they grow, maximizing your financial assets is at the top of the list. In today’s markets, it’s tough enough to turn a profit even when you do everything right.
Financial metrics and ratios offer business owners and executives a way to evaluate their company’s performance and benchmark it with other businesses.
Benchmarking is a valuable exercise. Industry-specific performance indicators provide invaluable and highly specialized information, but it is important to remember that different companies within an industry can have various measures of success.
Ratios, on the other hand, measure the relationship between two or more elements of your financial statements, and are used most effectively when comparing information over time. This gives you the ability to track your company’s performance and uncover signs of trouble.
Download the whitepaper to learn the common financial management mistakes to steer clear of and the 5 types of key financial metrics and ratios, that are almost universally relevant across industries, to measure the financial health of your business.
