Performance Metrics in Action
Link:
https://alistemarketing.com/key-business-performance-metrics/
Summary
The company’s success is dependent on various reports as well as the evaluation of metrics. The size of a business does not matter when it comes to the evaluation of performance metrics. These should be considered by both large and small businesses. Performance metrics are categorized into three groups; financial, employee performance, and marketing outcomes (Aliste Marketing, 2022). Financial performance carries the greatest importance to this write-up.
The article highlights various financial metrics. These include gross profit margin, time periods, total revenue, net profit margin, debt-asset ratio, and net profit. The gross profit is explained as the money left after paying the cost of goods that have been sold. The gross profit margin should be sufficient to cater to the operating expenses of a business. Whatever is left after the cost of goods is recouped and running expenses are paid is the profit (Szkutak, 2021).
The net profit is a strong indicator that informs the business owners about their bottom-line earnings. It is obtained by subtracting the total expenses from the total revenue. The net profit margin is a percentage of the revenue that remains after all the operating expenses, taxes, interests, and stock dividends are deducted from the gross profit. This metric is important to shareholders, investors, and owners (Aliste Marketing, 2022).
The debt-to-asset ratio is a critical metric for all businesses that have debt. It shows the total assets that have been financed through debt. The debt-asset ratio is obtained by dividing the total liabilities by the assets. The article also highlights an important metric that receives minimal attention, the customer acquisition cost. This is calculated by adding the advertisement expenses, marketing salaries, commissions, bonuses, and overheads, and dividing the sum by the number of clients (Aliste Marketing, 2022).
References
Aliste marketing. (2022). Key Business Performance Metrics. Retrieved from Aliste Marketing: https://alistemarketing.com/key-business-performance-metrics/
Szkutak, R. (2021). 15 Essential Business Metrics To Track. Forbes.
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Performance Metrics in Action
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