“Business By the Numbers - Part 5” discussed the importance of tracking your business by using numbers from your Profit and Loss statement to determine your Break Even Analysis.
The next topic to discuss is Z-Score. Again, we’ll use the information from the Vistage* “Formulas for Success” publication.
The final business KPI is our Z-Score. It is a measure of the overall health for most businesses. As with the other key indicators, what is important is to measure the trend year over year and see whether the Z-Score is increasing (which is good) or decreasing (which is not good).
0 - 1.09 Bankruptcy Imminent
1.10 - 2.60 Very Questionable
2.60 + Bankruptcy Not Imminent”
Business By the Numbers - Part 7 will feature Additional KPIs.