How is your business doing? If you’re like many small business owners, you might think good sales means good business. “Sales are good, so we must be profitable.” But when cash shortages appear at the end of each period, you might begin to ask yourself, “What’s going on here?”
The truth is, revenue isn’t such a good metric for determining your venture’s success. That’s because it doesn’t factor in expenses, which are sure to be high for a growing company. Subtract those out and you’re left with profit. Sure, that’s a useful number; ultimately net profit does tell how much you make. But it doesn’t tell the whole story!
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