Important KPIs To Understand Business Profitability
Every business requires a measure of growth. There are various key performance indicators (KPIs) that help you assess how your business is doing. If you're looking for ways to enhance your profitability, you need to first analyze how your business is currently performing. Here are a few KPIs to get you started.
Monthly Sales Growth
Sales are important. Sales can make or break your business. This KPI helps you understand how your sales revenue is growing over time. This KPI also gives you visibility on future revenue trends as you are creating goals to improve the growth rate.
Monthly Recurring Revenue
This KPI measures monthly revenue from your existing customers on monthly subscription plans. The goal of this KPI is to determine of revenue, how much of your MRR contributes to your total revenue.
Operating Cash Flow
Cash flow is always a touchy subject. OCF is important because it paints a quick financial picture of if you have enough cash on had to maintain. This KPI is very important to investors and creditors.
The quick ratio measures your ability to meet short-term obligations with liquid assets.
Customer Lifetime Value
Do you know who your loyal fan base is? Companies like Apple understand who their customers, how much their customers have spent with them over time and can also predict how much they will spend in the future.
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