552. Advanced Financial Metrics: Unlocking the Key to Sustainable Growth

In this episode, we go beyond the basics and dive deep into advanced financial metrics like EBITDA, Operating Leverage, Economic Value Added (EVA), and more. Discover how these metrics can drive profitability, optimise cash flow, and enhance strategic planning.

What You’ll Learn:

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• The importance of tracking advanced financial metrics

• How to use EBITDA and Operating Leverage to boost profitability

• Calculating Economic Value Added to assess value creation

• Strategies to optimise your Cash Conversion Cycle

• Using ROCE and Z-Score to assess financial health

Resources Mentioned:

- Podcast episode - 544 Understanding Business Finances Beyond the Basics: Advanced Metrics for Growth - https://www.annetteandco.co.uk/544-understanding-business-finances-beyond-the-basics/

- Strategic Financial Metrics Toolkit (Free Download) https://www.annetteandco.co.uk/strategic-financial-metrics-toolkit/

Connect with Me:

- Profit First UK Facebook Group: https://www.facebook.com/groups/915326342418247

- Instagram: https://www.instagram.com/annettefergs/

- LinkedIn: https://www.linkedin.com/in/annettefergusonuk/

- Website: https://www.annetteandco.co.uk/

Transcript

Welcome back to the podcast! And today, we’re diving into an advanced topic that can transform your business: Understanding Advanced Financial Metrics to Optimise Performance.

We often hear about basic metrics like profit margins and cash flow, but today, we’re going to go beyond that and discuss metrics that can drive sustainable growth for your small business. Whether you’re a seasoned entrepreneur or just starting out, mastering these metrics will set you on the path to success. So grab your notebook because we’re about to get into the details!”

The Importance of Tracking Advanced Financial Metrics

“Let’s kick things off by discussing why advanced financial metrics matter. As a business owner, you might be tracking your revenue and profit margins, which is great—but that’s just the beginning.

Metrics like EBITDA, Operating Leverage, and Return on Capital Employed (ROCE) provide a deeper understanding of your business’s health. They go beyond the basics to help you optimise efficiency, identify potential risks, and make strategic decisions.

By understanding these advanced metrics, you’re not just looking at the past—you’re using them to plan for a more profitable future.”

Understanding EBITDA and How It Impacts Strategic Planning

“Let’s start with EBITDA—that’s Earnings Before Interest, Taxes, Depreciation, and