Financial indicators

Profitability


  • Revenue - all income that has no payback or share obligations
  • Gross Profit Margin - revenue minus direct costs, as a percentage of revenue. A measure of how efficient the production of your product or service is;
  • Operating Income Margin - revenue minus direct costs, minus operating expenses, as a percentage of revenue. A measure of how profitable your core business is;
  • Net Income Margin - revenue minus all costs, as a percentage of revenue. A measure of how profitable your total business is;
  • Net Income - revenue minus all costs, the 'bottom line';
  • Return on Investment (ROI) - net income as a percentage of paid-in capital, a measure of the efficiency of an equity investment;
  • Return on Assets (ROA) - net income as a percentage of total assets, a measure of the ability of a company's assets to generate revenue;
  • Income per employee - net income divided by FTE (full time equivalent), a measure of the efficiency of a company's workforce.


Liquidity


  • Investments - the amount spent on fixed (non-liquid) assets;
  • Net Cash Flow - the change in cash balance over a period;
  • Cash at End of Period - the cash balance at the end of a period;
  • Runway from startdate - the number of months the company can operate before running out of cash;
  • To be financed - the amount needed per period to maintain a positive cash balance. Use the last section "19. Target Financing" to bring this amount back to € 0;
  • Current ratio - currents assets divided by current liabilities. A measure of the extent to which a company can pay its current bills. Should be >1
  • Quick ratio - current assets minus inventory, divided by current liabilities. A measure of the extent to which a company can pay its current bills quickly (with funds readily available). Should be >1


Leverage


Leverage is the use of debt in order to increase the return on invested equity.


  • Total Assets - means all resources that are owned by a company, which are found on the Asset side of the balance sheet. The other side, Equity+Liabilities, is composed of the way the assets are financed;
  • Equity - share capital (a company's ownership) and any (reservation of) profits attributable to it;
  • Net Cash - the cash balance at the end of a period minus the outstanding debt;
  • Debt/Equity ratio - the relative proportion of shareholders' equity and debt used to finance the company's assets. A high ratio may indicate that the company is much resourced with (outside) borrowing as compared to funding from shareholders;
  • Interest coverage ratio - income before interest expense and tax, divided by interest expense. A measure of a company's ability to honor its debt payments.