Key Financial Numbers Every Entrepreneur Must Track Monthly

Vinu: Manu, I don’t have time to study full financial statements every month. What are the exact numbers I should track?

Manu: Good thinking, Vinu. As an entrepreneur, you only need 8 critical numbers every month.

Vinu: What is the first one?

Manu: Monthly Sales.

For example, if this month’s revenue is ₹18 lakh and last month was ₹22 lakh, your demand trend is weakening.

Vinu: Second?

Manu: Gross Margin.

If sales are ₹18 lakh and cost of goods is ₹12 lakh, your gross profit is ₹6 lakh. If this keeps falling, pricing or cost control is a problem.

Vinu: And profit?

Manu: Yes—Net Profit.

If net profit is only ₹60,000 on ₹18 lakh sales, your business model may not be sustainable.

Vinu: What about cash?

Manu: Very important—Bank balance.

Even with ₹2 lakh profit, if bank balance is only ₹25,000, you are financially tight.

Vinu: Which working capital numbers should I watch?

Manu: Three numbers only:

Debtors, Inventory and Creditors.
If debtors are ₹28 lakh and your monthly sales are ₹18 lakh, collections are slow.
If inventory is ₹35 lakh, cash is locked.
If creditors are only ₹6 lakh, you are funding operations mostly from your own cash.

Vinu: Should I track loan numbers also?

Manu: Definitely. Track your monthly EMI outflow.

If your total monthly EMI is ₹2.40 lakh and monthly operating surplus is only ₹2.60 lakh, your cash buffer is very weak.

Vinu: Is there one simple safety check?

Manu: Yes. Check whether cash from business operations is positive.

If profit is ₹1.80 lakh but operating cash is negative ₹1 lakh, your business is under stress.

Vinu: So, in one line—what should I review every month?

Manu: Sales, gross margin, net profit, bank balance, debtors, inventory, creditors and EMI— these eight numbers tell you almost everything about your business health.

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