4 Financial Numbers Every Small Business Owner Should Check Quarterly

Running your business isn't just about selling more services—it's about smartly managing your money so your business stays strong and profitable. Checking a few important financial numbers every quarter helps you avoid money troubles, stay profitable, and make smart decisions.

Here are four important financial numbers you should check every quarter:

1. Profitability: Are You Really Making Money? Profitability is simply how much money you have left after paying all your expenses.

   • Net Profit Margin – How much of your revenue stays as profit after expenses? 

   • Return on Assets (ROA) – Are you making good use of your business assets? 

   • Return on Equity (ROE) – Are you making good returns for yourself or investors?

Why It Matters: If your profits are shrinking, you might need to adjust your prices or cut costs.

2. Liquidity: Can You Pay Your Bills? Liquidity means having enough cash to cover your short-term expenses.

   • Current Ratio – Do you have more money coming in than going out soon? 

   • Quick Ratio – Do you have enough cash immediately available?

Why It Matters: Low liquidity means you could face cash flow issues. It's wise to cut unnecessary costs or arrange extra cash before a crisis happens.

3. Solvency: Is Your Business Financially Healthy for the Long-Term? Solvency measures whether your business can handle its debts and remain stable long-term.

   • Debt-to-Equity Ratio – Are you carrying too much debt? 

   • Interest Coverage Ratio – Can your profits easily cover loan payments?

Why It Matters: Too much debt can put your business at risk. You may need to restructure debt or reduce expenses.

4. Operating Efficiency: Are You Using Resources Well? Efficiency shows how well your business uses resources like time and money to generate revenue.

   • Inventory Turnover – Are you using inventory or supplies quickly enough? 

   • Accounts Receivable Turnover – Are customers paying you promptly? 

   • Operating Expenses – Are you managing your costs effectively?

Why It Matters: Poor efficiency can mean lost profits. You might need to adjust pricing, simplify operations, or improve payment collections.

Checking these four numbers quarterly helps you: 

✅ Spot financial problems early 

✅ Make smarter hiring and investment choices 

✅ Stay profitable and manage your cash effectively

💡 Need help keeping track of these numbers and making strategic decisions? As a Fractional CFO, I help service-based businesses grow and thrive.

📞 Let’s talk! Schedule a consultation today - https://calendly.com/thecfosolution/30min