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4 financial and accounting indicators that every manager should pay attention to

If you are the manager of a company or even a sector, you must always be aware of strategic information that can make the business more efficient, competitive and productive. Financial and accounting indicators are essential for the management of your company to be more effective, as they will define the current status of your company. Check out the most important indices below!

– Indebtedness indicators

This is one of the main financial and accounting indicators, as it reveals the financial health of the business. The debt ratio is divided into two subcategories: general debt (EG) and financial debt (EF). Find out what each of these subcategories is about:

General indebtedness ratio: measures your company’s total debt, always relating it to its assets (an asset is understood to be everything the company owns and can somehow convert into cash). Therefore, the lower the EG, the better the financial health of your company.

EG Calculation Formula = (Total Short-Term and Long-Term Debt / Total Assets) x 100

Financial debt ratio: direct relationship between the company’s gross debt and what was invested in the business. When the index is very high, it means that the company is in a negative financial situation, which may even have a negative impact on its banking relationships.

Formula for calculating EF = Gross debt / equity

– Profitability indicators

The profitability indicator relates the company’s profit to the amount invested, thus measuring the return that the investment can provide to the business in percentage value. Another advantage of the profitability index is that it is able to demonstrate the feasibility of an investment in the planning phase, showing whether the investment will bring the return expected by entrepreneurs or if the investment is not financially viable. manner:

Profitability = (net income / investment) x 100

– Immobilization indicators

It is one of the most relevant financial and accounting indicators as it reveals the amount of the company’s capital committed and used. The indicators are divided into two categories: degree of immobilization of equity and immobilization of total assets. Learn more about them:

Degree of immobilization of equity: reveals which of the company’s resources cannot be used, therefore, the greater the investment in permanent assets, the smaller the current assets available for immediate use.

Degree of immobilization of total assets: varies from the degree of immobilization of equity and reveals the percentage of total assets that are spent by property, plant and equipment.

– Liquidity indicators

The liquidity accounting ratios are indicators that help to have a more realistic view of the financial health of the business, assessing its ability to meet its financial obligations, they are: General Liquidity, Immediate Liquidity, Current Liquidity and Dry Liquidity. Learn more about each one by clicking here [link building]!

Your company can do much more with Conmax Accounting Consulting!

Conmax has been in the market for over 30 years, being a leader in corporate accounting solutions. Based in Fortaleza and São Paulo, but operating directly in several states of the country, we are sure that we are adding value to new customers, helping them through corporate accounting to develop their business even more. With Conmax’s help, you can be carefree with your company’s accounting management and focus on the processes that expand your business. Click here and discover our services.

Also read: Economic and Financial Feasibility Study: learn about the benefits.

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