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How to measure the company’s financial performance?

Companies that want to achieve business success need to measure their financial performance. This way you can understand operational, administrative, technical, and business purposes.

It is important that all these business aspects are closely observed to ensure the economic and financial performance of the company. This is what we call financial analysis.

Financial analysis is done through monitoring of results and planning and it is from this that action management strategy can be taken. Many choose to look for a page that will lead them to a financial advisor to assist them with this process, but many companies also do this by themselves.

The points that demand attention to obtain the company’s financial performance are: economic, financial balance and growth.

Moreover, it is through performance indicators that a brief diagnosis of the company’s financial health becomes feasible. Find out in this article how to measure a company’s financial performance.

Performance Indicators

Performance indicators or financial KPIs are ways to measure a company’s financial performance. Through these data it is possible to know the health of the company in different periods, making it possible to make comparisons over the same period. Check out some of the financial performance indicators:

Gross Billing

This financial performance indicator represents the cash inflows to the company from sales. This way you can measure the amount that enters the business in a given period.

An important point is to know that billing is not a sign of profit, we have to consider other aspects.


This Performance Indicator shows the capital gain or return of what has been invested in the company. Make this calculation to find out how profitable and attractive your business is from the return on investment you make.

In general, the basic formula for calculating is dividing the company’s net income by the total Asset. Many businesses also make a profit from the stocks they have invested in, using things like forex signals to find the best trading options. These all need to be taken into account of the profitability of your own business.

Average Ticket

This performance indicator refers to the average value of each sale. It is an important value to consider in marketing strategies, especially for retailers.

For the entrepreneur, this indicator is interesting because it can indicate who are their best sellers or signal the competitive value of products or services in the market.

Debt Level

This indicator is often a source of constant concern for entrepreneurs. The indebtedness indicator is the dependence of the business in relation to the capital obtained from third parties.

The basis for calculating the company’s debt level is data contained in the Balance Sheet, that is dividing the total Liabilities by the total Assets.

Operating Margin

Operating margin is obtained by dividing operating income by net sales revenue. This indicator defines the percentage of each currency unit of sale.

This indicator is found after the deductions for expenses are met. Your business numbers and results will show you what is working and allow you to identify and eliminate mistakes.

Fixed Costs

One of the indicators that can never get out of control is fixed costs. These mean expenses that do not vary, even with billing changes, up or down. Increasing fixed costs without increasing revenues can signal business instability and have very detrimental long-term effects.

Business Stability Analysis

In addition to measuring the financial performance of the business, it is important to think about how viable it is through stability analysis. Thus, through a set of metrics, it’s possible to identify the company’s ability to generate profit. See below.

Billing by period

Track daily sales to conduct business stability analysis. Know your product or service and for how much and when it is sold.

Variable costs

Define costs that are directly associated with sales volume. Reversing fixed costs into variable costs can be a great strategy for companies.

Fixed Costs

It’s extremely necessary to understand what are the fixed costs and how much they represent with the business in operation. Monitoring of the amount of fixed costs should be permanent as well as actions to reduce them.

Contribution Margin

This is the indicator that would perform the profitability analysis, break-even point and the analysis of new projects. Also, the higher this rate, the greater the financial health of the company.

Operating profit

The end result after having paid all variable and fixed costs in the period.

Sales prices

Monitoring the sales prices of products and services should be a technical and strategic action. It is important to consider the factors of profitability, competitiveness, and market positioning. For sellers in eCommerce platforms like Amazon, the Shopkeeper software (https://www.sunkenstone.com/blog/shopkeeper-review/) can aid well in tracking their profit margin. The software automatically compares the performance against their historical records, profits by individual products, and many other customizable options.

After all, how to calculate the financial performance of the company?

After knowing the key performance indicators, you may be wondering how to calculate them to find the answer for your business.

And thus conclude that it can be complex to follow each of these measures, even though they are very necessary to understand the performance of finances.

Therefore the ideal is to use a platform that helps in the financial management of your company. The best solution for measuring a company’s financial performance is to use finance spreadsheets.

With the excel templates from Adnia Solutions just enter the necessary information that will be used in the measurements. The program itself will make the necessary calculations, reducing the time spent on management and, especially, human errors.

In addition, excel spreadsheets make it possible to track financial performance indicators for accounting services. It is a dashboard that allows you to analyze your financial data in an automated manner.

With this feature you can easily monitor the financial health of your business, allowing you to gain constant insights and make faster decisions. In addition to these costs, it’s vital that businesses also pay attention to their overheads, such as their utility bills. Energy bills can be expensive, so it’s important that businesses always look for better business electricity rates that could save them some money. Saving money on bills and overheads can improve financial performance, so businesses might want to read more here about saving energy. That advice applies to homeowners and business owners, so it should help to cut costs.

Furthermore, excel templates are designed to allow anyone in a company to analyze the organization’s financial data without using any specific technical skills.

This way, if you apply the knowledge about financial indicators by joining the Adnia Solutions excel templates, you will soon be able to notice the results in the growth of your company.

For that, count on Adnia Solutions, which is a reference in creating smart, innovative and incredibly easy-to-use Excel-based templates and dashboards. Check out all our finance spreadsheets.


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