Big Red Car here keeping score on YOU!

KPIs, talking key performance indicators. Scorecards.

I thought I had written about this subject, but I cannot find it. Must be getting a little spacey, the Big Red Car.

So, today, I want to run through quickly a couple of key performance indicators you should be keeping track of at your company.

KPI me, Big Red Car

OK, dear CEO, here is a quick look at some financial and general KPIs.

Gross Profit Margin as a percentage – gross revenue minus cost of goods sold

Net Profit Margin as a percentage – gross revenue minus cost of goods sold,. operating expenses, interest, and taxes

Monthly Recurring Revenue

Return on Equity as a percentage – this is more for companies which are up and running rather than a startup

Current Ratio – current assets divided by current liabilities

Monthly Overhead Rate

Fixed v Variable Costs

Monthly Burn Rate – how much money are you losing per month

Runway – at the above monthly burn rate how many months can you survive?

Revenue per FTE

Revenue per Customer

Growth Rate of Revenue – look at this on a monthly, quarterly, and annual basis

Inventory Conversion Cycle – how long does it take to convert your inventory into cash. This one is often overlooked.

Asset Turnover Ratio – the ratio between sales and average total assets, a measure of sales generation

Customer Acquisition Cost – expense to get that customer

Long Term Value of a Custom – expected revenue over the life of the relationship assuming a single CAC

LTV to CAC

CAC Recovery Time – how long does it take to recover the cost of acquiring a customer?

Monthly Active Users

This is a snapshot, not a comprehensive list, but a great company could exist using these for several years.

How do I KPI, Big Red Car?

First, calculate all these data points.

Second, chart them on a monthly basis.

Third, study the trend. Make the trend your friend. Do not ignore the trend.

That’s all there is to it, beloved CEO. Just start there.

But, hey, what the Hell do I really know anyway? I’m just a Big Red Car, y’all. I’m pulling for you.