To ensure the sustainability of his company, the manager needs benchmarks. The basis remains to know its cash flow and its profitability. The indicators must be simple, easy to produce and interpret and adapted to the activity. In the context of this article, we will cite a few essential indicators of what constitutes the two pillars of sustainable management of the company. Cash monitoring and the levers to improve it “cash is king!” “ , say the anglo-saxons. The cash position is an essential indicator, it is obtained from bank balances, monthly for example, taken on a fixed date to identify a trend. In the extension, it is necessary to establish a cash flow forecast: from the bank balance at the beginning of the month.
Identify the Main Foreseeable Flows
Their planned collection / disbursement dates, position them by month in an excel spreadsheet which then makes it possible to estimate the projected cash balance for at least three months. It must be taken into account that it is not because your cash flow decreases at certain times that your activity Tobacco Products Manufacturers Email List is not performing. However, it is a question of verifying that it is strong enough to hold over time. The company has several levers to improve its cash flow. Thus depending on the activities, the company can issue more intermediate invoices to “stick” as well as possible to the progress of the work and not wait until the work is almost finalized to issue the first invoice, negotiate additional deadlines with its suppliers.
Assess the Minimum Stock Level as Well as
Possible to avoid overstocking which takes up cash. Profitability monitoring one of the key benchmarks is the breakeven point . Which answers the question “how much turnover do i need to make to cover my expenses?” “. To determine this. The loads must be divid into two groups: variable Asia Email List expenses: those that vary. According to turnover (purchases in a trading activity) fix costs: those that must be spent. Regardless of the level of activity. You can then calculate the margin on variable costs (mcv). in value: mcv = turnover less. Variable expenses and in rate: margin rate = mcv / turnover. The breakeven point then results from the ratio between fixed costs and variable margin rate.
