Many business owners in the United States review their sales—but ignore the rest of the numbers.
The problem is that high revenue does not necessarily mean high profit. Without clear indicators, it’s impossible to know whether your company is growing in a healthy way or heading toward a cash-flow crisis.
The solution is not to fill your screen with incomprehensible charts, but to focus on key financial indicators—the ones that tell you, at a glance, whether your business is moving in the right direction.
In this article, you’ll see which indicators matter most, how to calculate them, and how to use them to make better decisions each month.
Monthly Revenue
It may seem obvious, but it’s not enough to “roughly know” how much you sell.
What to review each month:
- Total revenue for the month
- Comparison vs. the previous month
- Comparison vs. the same month last year
Why it matters:
It shows your business’s sales trend and helps you identify high and low seasons—key for planning and budgeting.
Gross Margin
Not everything that comes in stays—part of it goes to direct production or service costs.
Basic formula:
Gross Margin = (Sales – Direct Costs) / Sales × 100
Examples of direct costs:
- Raw materials
- Manufacturing costs
- Subcontracting directly tied to the service
- Sales commissions
Why it matters:
If your gross margin is low or declining month over month, you may be selling a lot but earning little. It’s the foundation for determining whether your business model is healthy.
Operating Expenses (OPEX)
These are the expenses required to keep your business running, even if they’re not directly tied to a product:
- Administrative salaries
- Rent
- Utilities
- Marketing
- Software
- Professional fees, etc.
What to monitor:
- Total operating expenses for the month
- Percentage of sales
- The categories that consume the most
Why it matters:
A profitable business can become unsustainable if operating expenses grow unchecked. Reviewing this monthly helps you adjust in time.
Net Profit and Net Margin
The key question: how much is left at the end?
Formulas:
- Net Profit = Revenue – Direct Costs – Operating Expenses – Taxes
- Net Margin = Net Profit / Revenue × 100
Why it matters:
It tells you what percentage of every dollar sold actually becomes profit. If you sell more but your net margin drops, you’re working harder to earn the same—or less.
Cash Flow
Cash flow answers one question: is more money coming in than going out?
What to review:
- Cash inflows (collections)
- Cash outflows (payments)
- Ending cash and bank balance
Why it matters:
Businesses don’t fail only due to lack of sales, but due to lack of cash to pay payroll, suppliers, taxes, and debt.
Even if your income statement looks good, sustained negative cash flow is a red flag.
Days Sales Outstanding (DSO)
If you sell on credit, selling isn’t enough—you need to collect.
Key metric:
DSO = (Accounts Receivable / Monthly Credit Sales) × 30
Why it matters:
The longer it takes to collect, the more strain on your cash flow. Identify slow-paying customers and adjust terms or credit policies.
Days Payable Outstanding (DPO)
This is the average time you take to pay your suppliers.
Basic formula:
DPO = (Accounts Payable / Monthly Purchases) × 30
Why it matters:
It shows how you’re using supplier credit. A good balance between DSO (collecting) and DPO (paying) is essential to avoid liquidity issues.
Break-Even Point
The break-even point tells you how much you need to sell to avoid losing money.
General idea:
Break-even sales = Fixed Costs / Contribution Margin
(Without getting technical, your advisor can help calculate this precisely.)
Why it matters:
If you’re consistently far below your break-even point, you likely have a structural issue with pricing, costs, or sales volume.
It’s a core indicator in comprehensive financial advisory.
Debt and Repayment Capacity
Debt isn’t bad—the risk is not being able to pay it.
Useful indicators:
- Debt-to-assets ratio
- Debt-to-EBITDA ratio (earnings before interest, taxes, depreciation, and amortization)
- Future payment schedule
Why it matters:
It helps you determine whether your company can take on new debt or should deleverage to protect stability.
Budget vs. Actual
Planning is useless if you don’t compare it to reality.
What to review each month:
- Budgeted vs. actual sales
- Budgeted vs. actual expenses
- Variances (amount and percentage) and their causes
Why it matters:
It allows you to adjust course during the year—not only at year-end. It’s the foundation of effective planning and budgeting, where numbers guide concrete decisions.
Turning Indicators into Actionable Decisions
Looking at numbers alone changes nothing. What matters is to:
- Identify patterns (trends, declines, seasonality)
- Connect indicators (sales + margin + cash + debt)
- Take action: raise prices, renegotiate with suppliers, cut expenses, seek financing, or invest more in channels that work
This analysis becomes much easier with a clear, visual, automatically updated dashboard.
How Ubox Helps with Your Financial Indicators
At Ubox, we support you through:
- Comprehensive financial advisory, to interpret your numbers and align decisions with your business goals
- Planning and budgeting services, where we set realistic targets and build your annual financial roadmap
- Cloud-based dashboards, connected to your accounting, banks, and sales platforms, so you always have an up-to-date snapshot
Our goal is for you to stop guessing and start running your business with clear data every month.
Request a Customized Financial Dashboard for Your Business
Every business is different: what a restaurant needs to track is not the same as an e-commerce store, a service agency, or a construction company.
That’s why the first step is designing a dashboard tailored to your reality:
- We define the critical indicators for your type of U.S. business
- We connect your data sources (accounting, banks, invoicing systems, e-commerce)
- We configure a clear, easy-to-understand visual panel you can review in minutes each month
Request a customized financial dashboard for your business and turn your finances into a clear decision-making tool—supported by Ubox’s expert guidance in comprehensive financial advisory and planning and budgeting.
