Vinu: Manu, I don’t have time to study full financial statements every month. What are the exact numbers I should track?

Manu: Good thinking, Vinu. As an entrepreneur, you only need 8 critical numbers every month.

Vinu: What is the first one?

Manu: Monthly Sales.

Vinu: Second?

Manu: Gross Margin.

Vinu: And profit?

Manu: Yes—Net Profit.

Vinu: What about cash?

Manu: Very important—Bank balance.

Vinu: Which working capital numbers should I watch?

Manu: Three numbers only:

Vinu: Should I track loan numbers also?

Manu: Definitely. Track your monthly EMI outflow.

Vinu: Is there one simple safety check?

Manu: Yes. Check whether cash from business operations is positive.

Vinu: So, in one line—what should I review every month?

Manu: Sales, gross margin, net profit, bank balance, debtors, inventory, creditors and EMI— these eight numbers tell you almost everything about your business health.

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