10 Financial Metrics Every Business Owner Should Review Monthly

Financial metrics are primarily pulled from a company’s financial statements (balance sheet, income statement, cash flow statement) and are used to assess a company's or an investment's financial performance, health, and stability.

They help business leaders make informed decisions regarding a company’s financial position and prospects.

As a business owner, several core financial metrics offer useful insight into how your business is performing. Reviewing these metrics and monitoring profitability, liquidity, and operational efficiency monthly helps you understand what is working and what needs attention.

These financial metrics help you identify trends, manage costs, and support better future financial decisions for long-term sustainability.

1. Cash Runway

Your cash runway tells you how many months you would have until you run out of money, based on your current burn rate. This is particularly useful if you’re hiring lots of people at once and want reassurance that you can cover costs in the event of sudden financial shocks. Lack of cash is a major cause of business failure.

A clear and regularly updated runway supports strategic hiring, purchasing, and effective management of company lifecycles.

2. Monthly Revenue

Monthly revenue shows how much money the business made in a certain month, and how it compares to previous months. Having your monthly revenue information helps you understand if you can afford a new hire or expand operations.

3. Gross Profit Margin

Gross profit margin is the percentage of revenue left after subtracting the direct costs of producing your goods or services. For example, if raw material prices change but the final selling price of the product stays the same, your GPM helps determine whether prices should rise, stay the same, or if costs should be cut.

Read more: Cash Flow vs Profit

4. Net Profit Margin

The net profit margin measures the percentage of revenue and other income remaining after subtracting all costs for the business, including the cost of goods sold, operating expenses, interest, and taxes.

You mustn't confuse your net profit margin with your gross profit margin.

5. Customer Acquisition Cost (CAC)

Customer Acquisition Cost is the cost of acquiring one customer. This metric helps you assess the effectiveness of your marketing campaigns and allocate budgets to activities that are most profitable to the company.

6. Burn rate

Your burn rate is the speed at which a company spends (or “burns”) its cash reserves to cover overhead expenses before achieving positive cash flow. Start-ups most often use it, and it is crucial for determining a company’s “cash runway”.

Knowing your burn rate is especially useful for preventing overspending when revenue is insufficient.

7. Net burn rate

Your net burn rate tells you how much money you’re consuming each month after accounting for revenue. In scenarios where you might need to decide whether to initiate fundraising, for example, knowing your net burn rate is highly beneficial because it helps you understand how much time you would have before you run out of money.

This is one of the key financial metrics used to calculate your cash runway.

8. Operating cash flow

Operating cash flow measures how much cash the business generates from its operations.

If you have a positive operating cash flow, it means that your business can sustain itself through its own operations. If it’s negative, it suggests that external funding is needed to keep afloat.

9. Churn rate

Churn rate is the percentage of customers/subscribers a business loses over a specific period. It serves as an indicator of customer retention, a strong signal of overall business health. For subscription-based businesses, knowing your churn rate can directly impact revenue predictability, customer acquisition costs, and customer lifetime value (LTV).

10. Debt-to-equity ratio

Your debt-to-equity ratio measures how much a company finances itself using equity (selling a portion of business ownership in exchange for capital) versus debt (borrowing money from lenders).

If you’re thinking about applying for a business loan, knowing your debt-to-equity ratio helps you reassure lenders or investors that your company is financially stable and capable of repaying the debt.

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To understand your company’s financial health, monitoring your metrics is critical. Knowing your numbers not only supports decision-making but also makes a huge difference to your long-term success!