Balanced Scorecard Toolkit for Crisis Management

The management of an organization needs to constantly monitor the performance of their company so as to ensure that the business is doing best that it can. In order to do so, business managers need a few essential metrics on hand.

It is important to realize that business performance management looks for opportunities within a business and then looks for ways to improve them to make a profit. To fully analyze and understand the position of a business, a number of metrics must be used.

However, there are four essential metrics that a business owner or manager should monitor and regulate constantly if they want to successful in the business.

Sales Growth Metric

Measuring the sales growth of a business is absolutely essential. This metric alone tells a business if it is headed in the right direction in terms of profit and sales. It tells a business if its marketing strategies, customer service, packaging, and etc are effective or ineffective.

A company that has an increasing sales growth figure is said to be doing well as their profits and sales are increasing, meaning that the businesses strategies are correct and vice versa.

Leverage Metric

It is important to realize that most businesses are financed by investors and loans. As a result, the majority of loan providers and investors will want to know how much debt the company has as compared to their annual income and owner’s equity. This is where the leverage metrics comes into play. Leverage metrics such as debt to asset ratio, quick ratio, ROCE ration and etc essentially show the attractiveness of the business to investors and lenders.

Business managers must always keep an eye on these metrics in order to ensure that the business is doing well and financing in the future is not a problem.

Cash Flow Metric

Cash flow ultimately determines how a business is doing financially. This metric tells business managers the amount of cash that is coming into the business relative to how much the business is spending.
While cash is not the primary source of income in a business, however, having a positive cash flow ensures that a business will be able to cover any short term expenses that may appear unexpectedly. As a result, having a positive cash flow is vital for the effectiveness of the business in the industry.

Production Metric

Production metrics are essential to a business as they provide the platform for all of the businesses operations. Production metrics allow a business to monitor their production efficiency and capabilities. By doing so, business managers can come up with ways to reduce costs while improving the quality of their products.

By keeping a few simple business performance management metrics in mind, businesses can ensure a good foreseeable future in terms of growth and profit.