It is rare for a business to not closely track and regularly report on financial metrics. Financial metrics are perhaps the best measure of the health of a business or organization. While many financial metrics have relatively simple math behind them, calculating these metrics based on raw financial data and at varying levels within the organization can sometimes prove challenging. This chapter is all about demonstrating how to calculate common financial metrics or KPIs. We will provide useful recipes whose techniques can be applied in a variety of situations.
In this chapter, we will cover the following recipes:
- Computing gross margin, revenue, and cost
- Building a revenue growth rate
- Generating an accounts payable turnover ratio
- Fashioning the market share and relative market share
- Determining compound interest
- Working with periodic revenue...