Category: Finance & KPIs

Key Insight: ABC analysis for inventory shows that roughly 20% of SKUs account for 80% of inventory value – but without adding the XYZ demand layer, you still don’t know which of those items are worth the cash they’re consuming. Most inventory problems look fine on a spreadsheet. Average days on hand, average turnover, average…

Key Insight: In most companies, 20-30% of SKUs haven’t moved meaningfully in 90+ days. That stock isn’t waiting to be sold. It’s an interest-free loan you made to yourself -capital that could be funding growth, sitting on a shelf instead. Your Warehouse Is Probably Your Largest Unmanaged Financial Position Companies spend months optimizing ad spend,…

Key Insight: A single average DSO number conceals the actual distribution of your receivables. In most companies, the top 20% of slow payers account for 60-70% of the total cash drag, and they never show up on the summary dashboard. Your finance dashboard says DSO is 45 days. Your CFO reviews it monthly. Nobody panics….

Days Payable Outstanding (DPO): Formula, Benchmarks, and the Hidden Cost of Paying Late Key Insight: Every extra day of DPO is a day you hold your supplier’s cash interest-free. But when DPO exceeds your supplier’s internal credit model, the “free financing” starts costing you in higher prices, longer lead times, and reduced priority. The inflection…

Net Profit Margin: Formula, Benchmarks, and Where the €750K Gap Hides A 3-point gap between your net margin and your industry’s median doesn’t sound like much. On €25M revenue, it’s €750,000 per year. That’s not a rounding error. That’s a specific set of costs that other companies in your industry have figured out how to…

Quick Ratio vs Current Ratio: Which One Is Lying? Your current ratio is 2.1. Your quick ratio is 0.8. That gap, 1.3 points, is inventory. At a mid-size manufacturer, that could be €4.2M of stock your balance sheet calls a current asset. Your bank calls it collateral. Your cash flow calls it nothing, because it…

Current Ratio: What It Actually Tells You About Liquidity A current ratio of 2.1 looks safe. It means you have €2.10 in current assets for every €1 in current liabilities. At a €30M manufacturer, that might feel like plenty of cushion. But strip out €3.2M of inventory that hasn’t moved in six months, and you’re…

Days Inventory Outstanding (DIO): Formula, Benchmarks, and Qlik Expressions A manufacturer running a 60-day DIO against a 40-day industry average isn’t just “holding extra stock.” It’s financing €822,000 in trapped working capital on behalf of inventory that hasn’t sold yet. That number comes from a real calculation: €15M COGS, a 20-day gap above benchmark, and…

Operating Margin: Formula, Benchmarks, and What It Reveals About Core Business Health A distribution business does €30M in revenue with a 3.8% operating margin. Industry benchmark for mid-market distribution is 5%. That 1.2 percentage point gap is €360,000 per year that the business is leaving on the table – not in some hypothetical optimized future,…

EBITDA Margin: Formula, Benchmarks, and What It Says About Your Business Value Two manufacturers. Both doing €25M in revenue. Both showing a net profit margin of 4%. At a 6x EBITDA multiple – standard for mid-market manufacturing – one is worth €27M and the other is worth €13.5M. Same revenue. Same net profit. Twice the…