Written by: Brielle Regdos, Content Writer

Staying on top of financial health is critical for any business. By monitoring the right key performance indicators (KPIs), owners can identify risks early, improve profitability, and make smarter strategic decisions. Some of the most important financial metrics to track include revenue, profit margins, cash flow, and customer-related indicators. Here are 7 crucial KPIs to consider when making sure you’re keeping good financial health:

1. Revenue

Revenue - total sales before expenses - reflects overall market demand and business momentum. Tracking total revenue as well as revenue by product or service line provides deeper insights into what’s driving growth and where opportunities lie.

2. Profitability Metrics

Revenue alone doesn’t tell the whole story. Profitability measures reveal how efficiently a business operates.

• Gross Profit Margin: (Revenue - Cost of Goods Sold) / Revenue
  Shows how efficiently products or services are produced and sold.
• Net Profit Margin: Net Income / Revenue
  Indicates the percentage of revenue left after all expenses, taxes, and interest. This is one of the clearest indicators of overall financial health.

3. Cash Flow

Cash flow measures the net amount of cash moving in and out of the business.

• Positive operating cash flow ensures bills, payroll, and growth investments can be covered.
• Negative cash flow can put a business at risk - even if revenue looks strong on paper.

One related KPI is accounts receivable turnover, which tracks how quickly customers pay invoices:

• A high ratio = efficient collections.
• A low ratio = potential cash crunch.

4. Liquidity & Leverage Metrics

These ratios help assess financial stability.

• Current Ratio: Current Assets / Current Liabilities
  Measures the ability to cover short-term obligations. A healthy benchmark is generally 1.5 to 2.
• Debt-to-Equity Ratio: Total Liabilities / Shareholders’ Equity
  Indicates reliance on debt financing. Lower ratios suggest stability, while extremely low ratios may mean missed opportunities to leverage financing for growth.

5. Break-Even Point

The break-even point shows the sales volume needed to cover all costs. Knowing this number helps set realistic sales targets and informs pricing strategies.

6. Customer-Related KPIs

Customers are at the heart of long-term business success.

• Customer Acquisition Cost (CAC): How much it costs to gain a new customer.
• Customer Lifetime Value (CLV): The long-term revenue a customer will generate.

For sustainable growth, CLV should always exceed CAC by a healthy margin.

7. Inventory Turnover (for product-based businesses)

Inventory turnover measures how quickly stock is sold and replenished:

• Low turnover may indicate overstocking or weak demand.
• High turnover can signal strong demand or insufficient stock levels.

By consistently monitoring these financial KPIs, business owners can detect problems early, improve cash management, strengthen profitability, and guide strategic growth. These metrics are not just for accountants, they are essential tools for achieving sustainable success.

Helping You Make Smarter Decisions with the Right Data

At enTune Financial Services, we make it a priority to not only help business owners track KPIs but also to use them as a decision-making compass. We provide tools, interpretation, and strategic guidance to turn numbers into smarter business moves; supporting healthcare and medical practices, Government contractors, law firms, manufacturing, nonprofits, professional services, real estate, retail, technology, and U.S. subsidiaries. If your business does not fall into one of these industries, that’s okay! Our team of financial experts will provide you with industry-specific financial services no matter which sector you operate in. Trusting enTune Financial Services could play a key role in helping your business not only understand but also effectively implement and monitor the essential financial metrics (KPIs) that drive profitability and growth! Contact us today!