01. Cash Flow from Operations

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Measures cash generated by core activities after expenses. Profits can be misleading if cash flow is tight due to slow receivables or inventory investments. Use a 3- to 6-month rolling cash forecast to spot upcoming shortfalls.

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02. Accounts Receivable Aging

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Breaks down unpaid invoices by 30, 60, and 90 days. Older receivables may harm liquidity and indicate credit issues. Regularly review aging reports to prioritize collection efforts and maintain healthy cash flow

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03. Gross Margin Percentage

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Shows sales revenue remaining after direct costs like materials and labor. Declining gross margin often signals rising costs or pricing issues. Benchmark versus your industry and investigate margin changes to protect profitability.

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04. Operating Expense Ratio

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Expresses operating expenses as a percentage of sales. A high ratio reduces available funds for growth. Track expense categories monthly to find cost reduction opportunities without compromising operations

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05. Customer Acquisition Cost (CAC)

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Calculates the total expense to gain a new customer, including marketing and sales costs. If CAC exceeds a customer’s lifetime value, growth is unsustainable. Regularly compare CAC to lifetime value to ensure profitable expansion.

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Why Track These Metrics?

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Consistent attention to these financial indicators gives you a comprehensive view of your business’s health.Turning data into actionable insights enables proactive management and builds resilience in the competitiveCanadian market.

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