Business leaders use various financial metrics to assess financial health. Key indicators include:
- Revenue Growth: Tracking changes in revenue over time to ensure the company is growing. - Profit Margins: Evaluating the ratio of profits to revenue to understand profitability. - Debt-to-Equity Ratio: Measuring financial leverage to ensure the company is not over-leveraged. - Cash Flow: Ensuring positive cash flow to meet operational needs and invest in future growth. - Return on Investment (ROI): Calculating the efficiency of investments made by the company.