This 2 minute video explains how to access the 7 key numbers in Clarity:
To find the 7 key numbers, click Numbers, Current from the menu bar. Important for every business, specific to tell a story to get an understanding of whats going on. P&L, BS, CashFlow statement, team productivity. For a better understanding of the 7 key numbers, you can find their definitions and calculations below:
Revenue Growth: How well the business is growing/declining. Revenue Growth is calculated by comparing your current period's annualised revenue to the previous financial year's revenue.
Gross Profit: Gross Profit % is calculated by dividing your gross profit figure by your revenue figure for the current period.
Operating Profit (EBITDA): Operating Profit (EBITDA) % is your net profit before interest, tax, depreciation and amortisation for the current period.
Core cash target: How much cash you need to have on account to pay your bills, tax and reserves for overheads. It's the ideal amount you will have in your bank account before spending on new projects, paying shareholders, hiring new team members etc. It's calculated by adding your taxes due and two months worth of overheads for the current period.
Cash Days: How long it takes for cash to go through your business. It's calculated by adding your aged receivable days (the average of how long it takes for your customers to pay you) to your work in progress days (the average of how long it takes for you to raise sales after completing work - if you're a service business) and adding to your inventory days (the average of how long it takes for to sell of stock/inventory after it's purchased) minus your aged payable days (the average of how long it takes you to pay your suppliers) for the current period.
Business Return: What type of return you're getting for your business based on it's performance and valuation. Business Return is our take on Return on Capital Employed for small businesses. It's like an internal rate of return for business owners to see if their sweat, time and money are worth being invested in their business.
It's calculated by taking the EBITDA (net profit before interest, tax, depreciation and amortisation) less dividends, for the current period, and dividing that figure by an assumed valuation of the business, based on EBITDA for the current period.
Revenue Per Employee: Ideally want to be pushing over £100K to get the most productivity out of each employee. Revenue Per Employee is calculated by dividing your revenue, for the current period, by all your full time equivalent employees (which you entered when setting up the company and this number can be amended in the Advance tab of Settings). For clients that outsource, this will also include full time equivalent subcontractors.