6 Key Metrics to Include in Your CFO Dashboard

Introduction

A CFO Dashboard is a customized report put together by a company's chief financial officer. It displays key financial metrics of the company in an organized, easily digestible format. The purpose of having a CFO Dashboard is to track financial performance, discover potential opportunities and make educated decisions.

Benefits of creating a CFO Dashboard include gaining an overall understanding of the company’s finances, tracking performance on current initiatives and improving long-term planning. With these benefits in mind, we will now look into 6 key metrics to include when creating a CFO Dashboard.

2. Key Metrics to Include in a CFO Dashboard

When setting up your CFO dashboard, it is important to select the metrics that give you the insight necessary to make the best decisions for your company. Here are 6 key metrics to include in your CFO dashboard.

a. Revenue

Revenue is the total amount of money received in exchange for goods or services by a company. As the chief financial officer, it is important to be aware of company revenue and assess how the company is doing against their financial projections. This will help you identify areas for improvement and determine where investments should be targeted for maximum growth.

b. Operating Profit

Operating profit measures a company's ability to generate revenue while keeping costs low. It includes revenue generated from operations, before expenses, taxes, and other deductions. This metric will give you an idea of a company's financial health and will be useful in determining future investments.

c. Cash Flow

Cash flow is the measure of money entering and exiting a company. It is important to monitor company cash flow to identify any potential liquidity issues and to assess the company's ability to pay its bills. Knowing the financial status of a company is essential for confident decision making.

d. Total Shareholder Returns

Total shareholder return (TSR) measures the return generated from an investment in a company's shares. This metric provides a comprehensive overview of a company's financial performance and is a great indicator of how well a company is performing financially.

e. Earnings Per Share

Earnings per share (EPS) is a metric used to measure a company's profitability. It is calculated by dividing a company's net income by its total number of outstanding shares. Monitoring EPS is useful for assessing a company's ability to generate profits, and can provide a valuable insight into the health of a company's finances.

f. Debt

Debt is the amount of money a company owes and is a crucial metric to track. Keeping track of the total debt of a company will help you identify any potential financial risks and will help you make better decisions with regards to investing and managing resources.

3. Revenue Metrics

Revenue metrics measure the health of your business by showing the inflow of cash through sales operations. They are a key component of success and strategic decision-making, so you need to make sure you are tracking the right ones to benefit your leadership team. Here are 6 key revenue metrics to consider in your CFO dashboard.

a. Revenue Growth

One key metric within your CFO dashboard should be revenue growth, which provides understanding of your overall financial performance. It is a macro outlook of how the company is doing compared to previous time periods, trends and even industry benchmarks. This metric allows you to monitor your success against internal and external goals. Revenue growth can also be compared against future goals and budgets to decide whether the company is on track.

b. Sales Cost of Goods Sold

Sales cost of goods sold (COGS) shows the total cost for producing and selling products or services. This key metric is an important performance indicator because it can also be used to determine gross profit margin. Gross profit margin is important in showing the profitability of the company operations, effectiveness of pricing and the success of cost saving initiatives. Paying close attention to this metric will enable you to make decisions that help grow and improve your company’s performance.

c. Market Share

Market share indicates the portion of the total sales of goods or services in the market that a company holds. It is a key performance indicator for understanding the overall performance of the organization. Market share shows the popularity of the producst or services and should be monitored to identify changes in consumer spending habits. This will enable you to take corrective action when needed and adjust the strategy used to reach customers.

Operating Profit Metrics

Operating profit metrics are essential for evaluating the overall financial performance of a business. Including these metrics on a CFO dashboard will provide a clear picture of how the business is making money from its operations and where there may be areas that need improvement. The operating profit metrics to consider on a CFO dashboard include gross margin and operating expenses.

Gross Margin

Gross margin is a measure of how much money a company earns for every dollar of its sales. To calculate it, the gross margin percentage is determined by subtracting the cost of goods sold from the total revenue, and then dividing by the total revenue. This calculation provides invaluable insight into how profitable the company is on a per-unit basis.

Operating Expenses

Operating expenses are a key component of every organization’s cost structure. This includes the cost of labor, materials, rent, utilities, and other ongoing expenses related to running the business. Monitoring these expenses and how they are impacting the bottom line can provide an important snapshot of the overall financial health of the business. Operating expenses can also be benchmarked against similar businesses in the industry to gain deeper insight into the financial performance of the organization.

By including operating profit metrics on a CFO dashboard, businesses can get a clear idea of their financial performance, identify areas for improvement, and measure their progress over time. These metrics provide a comprehensive view of the business and allow for better decision-making and resource allocation.

Cash Flow Metrics

Cash Flow is one of the key metrics CFOs should track in their dashboard. Understanding of Cash Flow and its components helps to predict the future financial performance of a business. Cash Flow is comprised of three components: Cash Flow from Operations, General & Administrative and Capital Expenditures.

Cash Flow From Operations

The Cash Flow From Operations is a direct measure of the cash generated or lost from the operating activities of the business. It is important to track the Cash Flow from Operations on a monthly, quarterly and yearly basis. CFOs should pay attention to the incoming and outgoing cash, as well as pay special attention to the net Cash Flow from Operations.

General & Administrative

The second component of Cash Flow that CFOs should track is General & Administrative expenses. This includes things like advertising, marketing and other administrative costs. It is important to keep a close eye on this metric, as it can have an impact on the overall cash position of the business. CFOs should track this metric on a monthly, quarterly and yearly basis.

Capital Expenditures

The last component of Cash Flow that CFOs should track is Capital Expenditures. This is the amount of cash spent on things like new equipment, property purchases and other investments. It is important to track this carefully, as it has a direct impact on the cash position of the business. CFOs should track this metric on a monthly, quarterly and yearly basis.

Total Shareholder Returns

Total Shareholder Return (TSR) is an indicator of a company’s total return on investment (ROI). It looks at the sum of shareholder dividends and the price appreciation of company stock. It is an important metric to consider when evaluating the performance of a company and its potential to maximize value for shareholders. Here are two key metrics to include in your CFO dashboard to measure TSR.

Dividend Yield

The dividend yield is a measure of the amount of money a company’s shareholders can expect to receive in the form of dividends each year. It is calculated as the total amount of dividends paid out divided by the market value of the company’s shares. The higher the dividend yield, the more attractive a company will be to potential investors. It is a useful indicator of the company’s overall performance and potential return on investment.

Price Appreciation

Price appreciation is a measure of the change in the market value of a company’s shares over a specific period of time. It is important to monitor this metric as it can be indicative of the company’s overall health and performance. A company whose stock has seen a significant increase in price over the course of the year is likely doing well and may be a good investment opportunity. Conversely, a company whose stock price has declined may be a warning sign of poor performance and should be further investigated.

Including key metrics related to Total Shareholder Returns on your CFO dashboard can give you a better understanding of the overall performance of your company and its potential for value appreciation for shareholders. By monitoring dividend yield and stock price appreciation, you can easily assess if your company is headed in the right direction.

Conclusion

Organizations experience immense value from a CFO dashboard that allows financial performance to be continually monitored in real-time. By having key metrics in place, Directors of Finance, the CFO and their team can better plan for the future, and make sound informed decisions. Effective CFO dashboards allow for data-driven decision making, that is comprehensive and efficient. The 6 key metrics discussed in this blog post will give your organization the necessary insights to make the best decisions powered by real-time data and analytics.

Summary of Key Metrics

Overall, the 6 key metrics for a CFO dashboard are: 1) overall revenue and cost performance, 2) cash flow management, 3) profitability metrics, 4) budget vs. actual comparisons, 5) financial forecasting and 6) key performance indicators.

Benefits of CFO Dashboard for Financial Insight

The primary benefit of having a CFO dashboard is that it allows a Deputy CFO to monitor the financial performance of the company in real-time. It also allows the board to make better informed decisions that are more data-driven. Additionally, a CFO dashboard allows the team to better plan for the future and evaluate results.Overall, the clarity, accuracy and operational efficiency that a CFO dashboard provides helps to ensure financial success.

A CFO dashboard is an important tool for any business with a focus on financial success. The six key metrics discussed in this blog post provide a good starting point for any business looking to implement a CFO dashboard.