The performance of a company can be assessed using a variety of key figures that reflect different aspects of the company. Here are some of the key figures that can be used to examine a company’s performance:
- Sales growth: Annual sales growth indicates how successfully the company is developing new sources of revenue and expanding its market share.
- Profit Margins: Gross margin, operating margin and net margin indicate the company’s profitability and its ability to generate profits.
- EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization): EBITDA is an important figure that reflects the company’s operating profitability by excluding financing costs and taxes.
- Liquidity ratios: These include the current ratio and the quick ratio, which measure the company’s ability to pay off short-term liabilities.
- Leverage ratio: The debt-to-equity ratio shows how heavily indebted the company is and how well it can service its debts.
- Working Capital: Working capital measures the company’s short-term financial health and is determined by the difference between assets and liabilities.
- Customer retention and satisfaction: Customer retention rates and customer satisfaction are critical to the long-term success of the company.
- Return on Investment (ROI): ROI shows how effectively the company is using investments to generate profits.
- Return on equity (ROE): ROE measures the return on equity and shows how well the company is using the capital invested.
- Employee productivity metrics: These include sales per employee and profit per employee, which reflect the efficiency and productivity of the company.
- Market Share: The company’s market share in its industry can provide insight into its competitive position.
- Customer Acquisition Cost (CAC) and Lifetime Value (LTV): These metrics are particularly important for SaaS companies and show the cost of acquiring new customers compared to the value those customers generate over their lifetime.
- Working capital cycle: This indicates how long it takes for the company to recover its invested capital through sales and cash receipts.
- Net Promoter Score (NPS): The NPS measures customer loyalty and the willingness of customers to recommend the company to others.
These metrics are not exhaustive and the meaning may vary depending on the industry and business model. The selection of relevant metrics depends on your company’s goals and strategy. A comprehensive analysis of these metrics can help you better understand the company’s performance and make strategic decisions.
