How this guide works
- Find the number in your accounts.
- See what a change could be telling you. Each page lists the possible explanations.
- Decide what to do. Each page suggests what you could check and change.
No page tells you what your numbers should be. They help you read your own.
The numbers
Available cash
How much of your bank balance is yours to spend.
Read the page →CashRunway
How many months your cash lasts.
Read the page →ProfitGross margin
How much of each sale is left after the direct cost of delivering it.
Read the page →ProfitBreak-even
How much you must sell before the business covers its costs.
Read the page →ProfitNet margin
How much of each sale you keep after every cost.
Read the page →Who owes youDebtor days
How long customers take to pay you.
Read the page →More numbers, and a page on reading them together, are on the way.
Tools that help
Also read Understanding Your Financial Statements and Profit vs Cash Flow.
Questions people ask
Who is this for?
Owners who are not accountants, whether you are running a business or planning one.
Do I still need an accountant?
Yes, for tax and your annual financial statements. This guide helps you read what they send you and know what to ask.
Can I use it before I start?
Yes. Work through the pages with your own estimates. They show what you would watch once you are trading.
Is this financial advice?
No. It is general information. Your accountant knows your business.