Key Financial metrics

 Do you know the 10 Key Financial Metrics Every Manager Should Know and Monitor?

1️⃣ Gross Profit Margin Gross profit margin is a profitability ratio that measures the percentage of revenue left after subtracting the cost of goods sold. 2️⃣ Net Profit Margin Net profit margin is a profitability ratio that measures the percentage of revenue and other income left after subtracting all business costs, including costs of goods sold, operating expenses, and taxes. 3️⃣ Working Capital Working capital is a liquidity measure that calculates whether the business can cover its current payment obligations with its current assets, and the value of the additional resources remaining to invest in growth. 4️⃣ Current Ratio The current ratio is a liquidity ratio that calculates if the business has sufficient short-term assets to satisfy short-term obligations. 5️⃣ Quick Ratio This is a stricter version of the current ratio which removes inventory from the numerator of that ratio because inventory is typically slow to convert to cash. 6️⃣ Debt-to-Equity Ratio The debt-to-equity ratio is a solvency ratio that measures the proportion of equity versus debt used by a company to finance its operations. 7️⃣ Cash Conversion Cycle The cash conversion cycle is a financial metric that includes three separate efficiency ratios to measure how much of the company's cash is tied up in net working capital assets during the period. 8️⃣ Total Asset Turnover Total asset turnover is an efficiency ratio that measures how efficiently a company uses its assets to generate revenue. 9️⃣ Return on Equity Return on equity is a profitability ratio that indicates how well the business uses investor capital to earn profits for the business. 🔟 Return on Assets Return on assets is another profitability ratio that indicates how well the company manages its assets to earn profits for the business.