In today’s fast-paced business world, financial literacy isn’t just an added advantage—it’s the foundation of success. A recent study, “Financial Literacy of Entrepreneurs and Companies’ Performance” sheds light on how entrepreneurs’ financial behaviors drive their companies’ performance.
Tracking your gross profit margin (GPM) is one of the most crucial financial metrics for small and medium-sized businesses (SMBs). GPM helps business owners understand how efficiently they manage production costs in relation to revenue, providing insights into profitability and pricing strategy. A healthy GPM ensures that your business is retaining enough profit after covering the cost of goods sold (COGS) to sustain operations and plan for future growth.
However, it’s essential to recognize that gross profit margin and cash flow are different. While GPM reflects profitability, cash flow measures the money moving in and out of the business. Strong profit margins don’t always guarantee strong cash flow, so SMB owners need to monitor both closely.
By consistently tracking GPM and understanding how it impacts cash flow, SMBs can improve financial health, plan for sustainable growth, and remain competitive in their industries.
The world is changing massively, and not least, the geopolitical landscape. With elections due soon in the USA, and AUS, and recent landslide election of the Labour government, the impact to small and medium businesses could be big
Intro Australia has been in a per capita recession for several months. Some businesses are thriving, while others, particularly those dependent on discretionary spending, are struggling. As accountants, your skills are critical in both scenarios. Business Advice: The Power of 1% Scenario 1 – Your client’s crushing it Your client’s gross and net margins are […]
What are the 5 business numbers that warn you of future cashflow problems? Many businesses have been in this situation – sales are great, there’s money in the bank, and yet, 6 months later, you’re struggling to finance your operations despite record sales within your business. The trouble is, you neither have the time, nor […]
Inflationary pressures are building in many economies. What do they mean for businesses and the skills needed from Accountants and Advisors in providing solid advice to their clients?
Entrepreneurs and business owners are the financial life blood of communities, and wider economies in the provision of products and services. According to the Small Business Administration (SBA) small businesses in the USA represent 99.9% of employers and thus are the top employer for millions of people. This is similar to most advanced economies, such […]
Forward Earlier this year, we wrote an article about business complacency and testing your business’ resiliency as we looked to exit the global Covid19 pandemic. One of the areas of concern, following pandemic recovery, was significant pressures foreseen in the global economy, beautifully argued by Charles Goodhart, Manoj Pradhan (2020). As we head into the tail […]
Business Lockdowns: Something Doesn’t Add Up With The Covid Numbers The Devastation To Business From Lockdown May Not Be Justified On Saturday, NSW Health gave advice to the NSW Premier that the potential for an uncontrolled spread of Covid 19 in Greater Sydney was great, and business lockdowns were put into place. Reading twitter, many […]
Great, you’ve got your business health score, but how do you know if your business is healthy?, what does it mean and what can you do to improve it? This post will make you an expert in minutes Business Health Score The business health score is the first place to start in assessing how your […]
