The most commonly used indicators for performance evaluation and comparison of actual figures with projected figures are as follows:
- Break-even point: shows at which turnover revenues begin to offset fixed costs, after which the company begins to make a real profit.
- Marginal rate: allows knowing the rate of return per unit of product (product, service) according to the related direct and indirect costs.
- Earnings before interest, taxes and depreciation: allows you to measure a company's future profitability.
Assessing the viability of a companyIn order to assess the viability of a company, an analysis of its financial condition must be carried out. Examine: current assets, profitability, liquidity, market conditions, inflation rates, interest rates.
Evaluation of company's potentialSWOT-analysis allows to determine internal strengths and weaknesses of the company, to determine ways of development, taking into account its opportunities and potential threats. It should consider the actual market position of the company, level of its competitors and its marketing competence.