EBITDA Explained: Cash Profit, Risks, and Real Business Insights
What is EBITDA? Simply put: Earnings Before Interest, Tax, Depreciation & Amortisation. It will often be referred to as the ‘cash profit’ of a business as it reflects the core financial performance of a business, excluding non-cash items and costs related to financing or tax. Components of EBITDA Tangible vs Intangible Assets Defined Both amortisation […]
Understanding Productivity Factor
What is Productivity Factor? In simple terms, your Productivity Factor measures how much gross profit your business generates for every $1 spent on administration wages and associated costs. The formula is straightforward: Productivity Factor = Gross Profit Dollars ÷ Admin Wages (plus super and related costs) Gross Profit Dollars = Revenue – Cost of Goods Sold (COGS) […]
Linear vs Stepped Expenses Explained
Most businesses think about costs too simply. They split them into fixed and variable, direct and overhead. That’s fine for your accountant’s ledger — but it’s not enough if you actually run a business. If you want to control costs like a real CFO, you need to understand how they behave as your business grows.That’s […]
Finance Fundamentals: Return on Capital
The Ultimate Efficiency Metric for Business Leaders When you strip back the noise of business performance, there are a handful of financial metrics that genuinely tell you if your company is working as hard as you are. One of the most powerful, and one that too many business leaders overlook, is Return on Capital (ROC). […]
What Is EBIT? A Simple Guide for Business Owners
What is EBIT? Simply put: Earnings Before Interest & Tax EBIT is a critical metric used to evaluate a business’s performance because it focuses purely on operational profit, excluding variables such as interest and tax. It’s commonly used as a baseline reference when comparing business elements like return on capital.
Are You Tracking Rework? What It Is & How to Quantify It
Understanding Rework What is rework? Rework is the process of redoing work that wasn’t done properly the first time. Specifically, rework is the additional labour, materials and time required for a product or service that doesn’t meet initial standards of quality or functioning that, when completed, does meet its requirements. Why does tracking rework matter? […]
What Does It Mean to Make Informed Business Decisions?
Understanding Informed Business Decisions One of the biggest struggles business owners and leaders face is uncertainty in making important decisions. It’s common to feel overwhelmed when faced with significant investments. If you’re spending a million dollars on a piece of machinery or equipment, or investing in a new sales manager where the recruitment fees and […]
Good vs Bad Overtime: What It Is & How to Benchmark It
Understanding Overtime EXECUTIVE SUMMARY Overtime management is not simply about minimising expenses, but understanding whether extra hours propel your business forward or reflect deeper issues. To understand whether overtime in your business is good or bad, we use productivity metrics that show much your business generates in revenue or how much it costs your business […]
5 Proven Strategies to Improve Sales Travel ROI
Business travel, when leveraged correctly, can shift from being a burdensome cost to a significant revenue generator. The secret to this transformation lies in strategic planning and execution. Every trip should be viewed through the lens of opportunity, whether it’s to solidify existing relationships, tap into new markets or close pending deals.
10 Effective Ways to Improve Debtor Management
Debtor Management For Businesses Businesses often struggle with managing their debtors, or accounts receivable, effectively. This means they’re probably experiencing cash flow challenges, strained relationships, and they could even be missing out on opportunities for growth.