5 main financial indicators and their impact on company decisions

[shukla7789]

What are financial indicators and what are they for?
What are the 5 main financial indicators to monitor?
Return on equity
Financial indicators of current liquidity
Debt level
Return on investment
Have control over your service expenses and measure your return on investment with our spreadsheet. Download it now!
Net margin for the year
How to monitor and use these financial and asset indicators in company decisions?
In the business world, most decisions can be translated into financial results. Some strategies improve the company's performance, while others make things more difficult. That's why it's important to know the main financial indicators .

Some of the most important indicators are linked to the fusion database of the business and the return obtained from certain investments , as well as the debt and financial indicators of the company's liquidity.

In the following topics, we will delve deeper into the main financial indicators. We will clearly explain what financial indicators are for, as well as show you how to measure them. Enjoy your reading!

banner-blog-diagnostic-tool
What are financial indicators and what are they for?
There are many financial and equity indicators. As a company grows, it becomes possible to analyze it from different perspectives through different financial reports, such as:

The balance sheet (BP);
The income statement (DRE).
To make it easier, think of these indicators as a kind of thermometer. With them, you can know whether the business is in good economic and financial health, as well as diagnose any weaknesses that need to be corrected over time.

There are a huge number of benefits to tracking key financial indicators, some of the main ones being:

Development of an accurate vision of the business;
Identification of “bottlenecks” that need to be corrected;
Reduction of costs and non-strategic expenses;
Increased profitability of the enterprise;
Evidence-based management decision making .
With this in mind, it is clear how important it is to know the main indicators and how to analyze them.

In addition to improving business results, it increases manager confidence and predictability in decisions. Below, we present the main financial indicators that a company should monitor.

What are the 5 main financial indicators to monitor?
A basic financial analysis revolves around three types of indicators: profitability, debt and the business's liquidity level.

It is also important when analyzing financial indicators to consider the return on investment ( ROI ) and the net margin for the year.