Your key performance indicator results
After entering your financial information for the time period you selected at the beginning, you’ll get a breakdown of results in key areas of focus for your business’s cash flow.
Marginal cash flow: The cash flow margin measures how well your business operations create cash from sales of products or services. It’s a key profitability indicator. The result shows the amount of cash flow in cents that your business is generating per $1 dollar of revenue.
Your business’s cash cycle: This shows the total amount of time it takes for your customer to pay you for your product or service. It starts from the purchase of inventory or the provision of services to the day you’re paid.
Gross margin: This is the margin your business makes each time it makes a sale. As this increases, so does your profit and cash flow. The result shows the amount in cents you make for each additional $1 dollar of revenue generated.
Net profit: This is the profit that remains after all expenses involved in running your business have been paid. The result shows the amount of cents per $1 dollar of revenue minus overhead costs.
Investment in working capital: Working capital is the money needed to fund the day to day operations of your business, like paying suppliers and expenses. The result shows the amount of cash flow in cents you have invested in working capital for every $1 dollar of revenue.
Debtors days: This is the average time between the sale of goods or services and receiving payment for them. The faster you collect from your debtors the better your cash flow.
Inventory days: This is the average length of time you hold onto inventory before it’s sold. The quicker you get rid of it the better.
Creditors days: This is the average time it takes you to pay your creditors for your inventory or service. The longer your payment terms are the better your cash flow will be.