Monitor Price Impact on Profit with Gross Profit Margin
Core Viability Check: The Gross Profit Margin Routine Why This Routine Matters Gross Profit Margin is the most fundamental indicator of whether your core business model works. It tells you, before considering rent, salaries, and other overheads, how much profit you make on every dollar of sales. If this number is consistently too low or […]
Build Better Routines Faster: Search our Prefab Routines Catalog
Your whole business runs on repeatable Routines; and can’t operate without them! Because they consume so much of your business’s time and other resources, you want them to be as streamlined and as effective as possible. To save you research, we provide guidelines for important Routines below. Also see our companion Library of Prefab 90 […]
Simple DIY Spreadsheet Template for Financial Ratio Information
We encourage the use of this type of dashboard tool because; It is difficult to visualize what’s happening in your business with just a jumble of numbers and you will be doing this analysis regularly so you should automate it as much as possible to make it a “good” Routine To allow you to set […]
Longer Term Financial Risk Warning: Debt-to-Equity Ratio Check Routine
Why This Routine Matters The Debt-to-Equity (D/E) Ratio reveals how your business is financed: by borrowing (debt) or by owner/investor capital (equity). This is a critical measure of long-term financial risk. A high D/E means you are relying heavily on lenders and interest payments, making your business fragile during economic downturns. This routine monitors your […]
Watch Debt Risk: Current Ratio Alert Reduces Stress
Why This Routine Matters The Current Ratio is your liquidity lifeline—your ability to pay the bills due in the next 12 months using the assets you can quickly convert to cash (like your bank balance and inventory). Banks rely on this ratio when considering loans. A Current Ratio below 1.0 is a red alert that […]
The Bottom Line Truth: The Net Profit Margin Routine
The Bottom Line Truth: The Net Profit Margin Routine Why This Routine Matters Net Profit Margin (NPM) is the ultimate truth in business—what you actually get to keep. It measures the percentage of revenue that remains as true profit after all expenses, taxes, and interest have been paid. Monitoring this routine ensures you are not […]
Monitor Impact of Overhead Costs on Profit
Expense Control Engine: The Overhead Costs Routine Why This Routine Matters The Overhead Costs Ratio (OCR) is your weapon against “cost creep”—the slow, silent increase in fixed costs (rent, subscriptions, salaries) that eats away at your hard-earned Gross Profit. This routine isolates how much of every sales dollar goes to administrative and operating costs, helping […]
Manage Accounts Receivable for Better Cashflow
Quick Cash Flow Fix: The Accounts Receivable Routine Why This Routine Matters The number one reason small businesses fail is a lack of cash, not a lack of profit. This routine gives you a precise measure of how fast your sales turn into usable cash. If you wait 60 days to get paid on a […]