Management Tip: Measure the money you're making

1) Growth

Growth in sales is usuall, but not always, a positive sign. Look for year over year growth but remember that it has to be profitable and sustainable.

2) Cash generation

Cash allows companies to stay in business. Cash generation is the difference between all the cash that flows into the business and all the cash that flows out. Investigate where the cash is generated, how it's used, and whether enough is coming in.

3) Return on assets

A company's return on assets is its net profit divided by the average value of its assets during a given period of time. This measure shows you how well your company is using its assets to make money.

Do you measure the money you are making?