When coaching
CEOs to increase corporate performance, we
holistically assess our client’s business
and look for operational variance gaps and
best practices usage in the company’s
business marketing, sales, strategy and
financial management approaches to help them
maximize their year over year growth.
Through our
advisement programs, we assess their current
financial position and compare their P and
L’s (profit and loss reports) against their
competitors from our proprietary database of
financials submitted by over 50,000 CPAs.
Using this analytical methodology, we have
identified six specific business benchmarks
that we use to chart our client’s current
position as compared to their unique
industry and that is used as a CEO success
scorecard.
If you are
looking to grow your business — metrics is a
key business driver. If you are trying to
succeed in a down economy — then your action
steps must be proactive, not reactive.
Are you
managing your company by business and
financial metrics? Is your management team
knowledgeable about your industry or are
they just ambivalent?
6
Scorecard Areas You Should Manage Monthly
Financial LIQUIDITY
Measures your
ability to meet daily financial obligations
and includes:
-
Inventory (or staff bench unitization
rate) in stock in days
- Account Receivable in days
- Accounts Payables in days
PROFITS & PROFIT MARGIN
Are
profitability trends favorable in the
company?
Net Profit Margin
Advertising Cost to Sales
Rent to Sales
Payroll Percent to Sales
Operating Cash Flow Margin
SALES
Are sales
growing?
- Sales Year Over Year
Growth
- Sales by Product Year to Year
- Sales by Services Year to Year
BORROWING Capacity
Is the
company borrowing profitably?
- Interest Coverage
Ratio
- Debt to Equity Ratio
- Debt Leverage Ratio
Corporate ASSETS Usage
Is the
company using gross fixed assets
effectively?
- Return on equity
- Return on assets
- Fixed asset turnover
Employees Performance
Is the
company hiring effectively?
- Revenue per employee
- Employee turnover by department
- Profit per employee
Each one of
these assessment areas should be placed into
a monthly scorecard that gives you month to
month and year to year comparisons.
If your CFO or accountant does not do it,
find someone who will.
Growth can be attained for those who manage
metrically — those who don’t will get the
same results that they got last year . . .
and may not be around next year.
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