5 Financial Metrics Every Business Owner Should Understand

You don't need to love accounting to run a healthy business, but you do need a handful of numbers. These tell most of the story.

Gross margin shows how much each sale actually leaves after direct costs. Operating cash flow shows whether your day-to-day activity generates cash. Working capital shows your short-term cushion. Customer acquisition cost compared to what a customer is worth shows whether your marketing pays for itself. And revenue concentration reveals how much you depend on one or two clients.

Tracking these consistently — even in a simple spreadsheet — is often the first step toward better decisions. This article will be expanded with further guidance.