6 Key Financial Metrics to track

1. 6 KEY FINANCIAL METRICS TO TRACK 1) REVENUE Revenue is the total amount of money that a business makes by selling products, and services before any expenses are taken out. Revenue = Sale price X Units sold 2) EXPENSES Expenses are all the costs a business needs to operate. Expenses = Cost of goods sold + salaries + sales commissions + marketing costs + real estate expenses + utilities 3) NET INCOME Net profit or net income is the money left over after subtracting all the expenses & taxes for revenue. Net profit = Revenue – Total expenses 4) CASH FLOW Cash flow refers to the amount of money moving in and out of your business over a period of time. Cash in < Cash Out = Negative cash flow Cash In > Cash Out = Positive Cash flow Cash In = Cash Flow = Breakeven Operating cash flow = Net income + Non-Cash expenses – Increase in working capital. 5) ACCOUNTS RECEIVABLE AGEING AR ageing measures how many days it takes your customers to clear the invoice? Organise the clients by due date – immediately is 1-30 days, 31-60 days – late to see how much money is collectable from different clients and customers. 6) ACCOUNTS PAYABLE AGEING AP ageing measures - how many days it takes for your business to clear the dues? Website - www.paci.ai Contact - advisory@paci.ai