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Key Metrics to Help You Measure the Success of Your Business

Business metrics are a way to evaluate a business’s year-round activities and measure how successful they’ve been. These are used to assess how well a company is performing and what more needs to be done.

These 3 key metrics can help you understand your business’s success better.

 

Financial Statements

 

One of the most critical metrics for measuring your business’s success is via your financial statements. These documents reflect the amount of money you’re generating and help you determine your financial standing. In particular, you should keep tabs on your income statement, your cash flow statement, and your balance sheet.

The income statement evaluates your business’s profitability during a specified period and gives you an insight into your profits and losses. The cash flow statement tells you how much liquid cash your business has acquired. The balance sheet displays your company’s financial health and records your debts and shares. Tracking your financial statements can help you effectively measure your growth and success.

 

Sales Revenue

 

Another thing you can use to track your success is your sales revenue. Monthly, bi-annual, or yearly sales reports give you an insight into how well your marketing strategies are working, how interested consumers are in your products, and how your business performance compares with your competitors’ performances.  

You can use the information obtained through your sales revenue to set new goals, understand competitor activity and industry trends, and determine what external factors affect your outreach. This allows you to make the necessary changes to improve your performance.  

letters spelling out the word “sale”


Overhead Costs


Overhead costs are independent of the products and services a business produces or offers. These are fixed costs, e.g., employee salaries and office rents that need to be paid each month. However, fixed costs don’t always remain “fixed.” They can exponentially increase if they aren’t appropriately monitored and put you in a bit of a pickle.

It’s imperative that you track your business’s overhead costs and stay updated on any changes that occur. The information tracked needs to be utilized when you’re updating your business plan or creating a budget. This helps in lowering overhead costs and keeping your business’s internal affairs less costly.

At Duggal Professional Corporation, we offer business consulting services tailored to your business needs. Our team works closely with clients to help them establish their ventures and pivot their businesses to success. From financial reporting and bookkeeping services to start-up requirements and payroll services, we do it all.


Get in touch with us today for more details about our accounting consultancy in Edmonton.