👉 Five Financial Metrics You’re (Probably) Ignoring

Revenue is sexy. Profit is predictable. But if you’re not tracking these five metrics, you’re flying blindfolded.

1️⃣ Gross Profit Margin

What it is: (Revenue - Cost of Goods Sold) / Revenue

Why it matters: Reveals whether your core product/service is actually profitable.

Meredith’s Tip: “If your margin is below industry benchmarks, renegotiate supplier contracts before slashing prices.”

2️⃣ Operating Cash Flow (OCF)

What it is: Cash generated from day-to-day operations.

Why it matters: Profit ≠ cash. I’ve watched “profitable” companies drown because receivables piled up.

Meredith’s Tip: Run weekly cash flow forecasts. If OCF dips below 1.5x monthly expenses, sound the alarm.

3️⃣ Customer Acquisition Cost (CAC) Payback Period

What it is: How many months it takes to recoup CAC.

Why it matters: A SaaS client reduced churn 30% by realizing their payback period was longer than the average customer lifespan.

Meredith’s Tip: Aim for <12 months. If longer, rethink pricing or marketing channels.

4️⃣ Debt-to-Equity Ratio

What it is: Total Liabilities / Shareholders’ Equity

Why it matters: A home services firm I advised had a 4:1 ratio—banks said ‘no’ to expansion loans until they rebalanced.

Meredith’s Tip: Keep it under 2:1 unless you are in a capital-heavy industry (eg, real estate).

5️⃣ Net Burn Rate

What it is: Monthly cash spent minus income.

Why it matters: Startups, this is your lifeline. One founder told me, “We had 6 months of runway… until I calculated it.”

Meredith’s Tip: If burn rate exceeds 20% of cash reserves, pause and pivot.

Tracking these won’t just save you from disaster—it’ll expose hidden growth levers. Still relying on ‘gut feeling’? Let’s fix that.

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👉 Five Financial Metrics You’re (Probably) Ignoring—And Why They Matter