- Salaries and wages of all employees
- Sales margins
- Components of direct costs
- Other fixed and variable costs
- AR – days sales outstanding (DSO)
- AP – days purchases outstanding (DPO)
- Inventory turns
- Percentage of completion analysis
- Debt analysis
- Leverage on assets
- Debt service coverage
- Asset utilization
- Breakeven analysis
- Cash flow analysis
- Productivity analysis
- Liquidity analysis
Measure Performance for Accountability
Now that we have the financial model with all the drives and metrics that create the historical financials, we can see and define, mathematically, those things that need to change in order to restore and enhance profitability. Once these changes are defined, metrics are put in place to measure against these goals and create accountability. Now, the tools are in place to make changes and be assured the performance is happening to create financial success. The final results are increased profitability and cash flow that meet or exceed the company goals.
