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What is the most effective way to allocate resources?

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What additional funds can the company attract and what are the sources?

Why are some customers and customer categories more valuable to your business?

How does economic-financial analysis help me in the development of my business?

Economic and financial analysis is an extremely important activity in the development of a company because it helps to establish the company’s position in relation to competitors and industry, but also how it evolves, to identify issues that need adjustments to improve performance. financial and economic.

How is the profit or loss threshold of the business or investment calculated?

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What are the main financial indicators and how are they monitored?

At a practical and theoretical level, there are a significant number of indicators that, through structuring and personalization, offer the possibility of making complex and useful tools in determining trends and / or for comparisons with other companies in the sector in which they operate.

General liquidity = Current assets / Current liabilities
Immediate liquidity = Current assets, inventories / Current liabilities
Payment capacity = House and bank accounts + short-term investments / Current liabilities
Risk / debt indicators
In ensuring the necessary resources for current activities and investments, a balanced ratio between debt and capital is recommended. This report is correlated with the industry in which it operates and the phase in which the company finds itself.
Overall Debt Rate = Total Debt / Total Assets
Leverage = Total Liabilities / Total Assets
Overall solvency ratio = Total assets / Current liabilities
Interest coverage = Profit before payment of interest and income tax (EBIT) / Interest expense
Activity indicators
The company’s activity must be carried out within the limits of certain volume and frequency intervals in order to position itself above the break-even point and implicitly in order to be a profitable activity.
Debt turnover (customers) = Turnover / Average customer balance
Debt turnover (customers) = Average customer balance / Turnover * 365 (number of days)
Credit turnover (supplier) = Purchases of goods / Average balance of suppliers
Credit turnover (supplier) = Average balance of suppliers / Purchases of goods * 365 (number of days)
Inventory turnover = Cost of sales / Average stock
Inventory turnover = Average stock / Cost of sales * 365 (number of days)
Profitability indicators
These indicators reveal the efficiency of the company in using its resources to generate profit.
Operating profit margin = Operating profit (EBIT) / Turnover * 100
Gross Sales Margin = Gross Sales Profit / Turnover * 100
Net Sales Margin = Net Profit / Turnover * 100
Economic profitability = Net profit / Total assets * 100
Financial return = Net profit / Equity * 100
Rate of return on resources consumed = Net profit / Total expenditure

Return on capital employed = Profit before payment of interest and income tax (EBIT) / Capital employed
These indicators individually present structural and evolutionary realities within the company. These indicators, in the analysis activity, must be structured and analyzed in customized models depending on the field of activity, the complexity of the business and its size.
Active monitoring of indicators provides validations and / or warnings regarding the quality of the company’s activity. Thus, the frequency of monitoring certain groups of indicators is decided by the risk profile of the company, the general economic situation of the industry in which it operates and the managerial objectives.

What are the key financial indicators and how are they monitored?

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