Definition

Looking at how much profit is made on each sale after covering costs. Breaking down these numbers can reveal ways to improve earnings.

What to consider

  • Simplify each step for efficiency.
  • Identify and eliminate bottlenecks.
  • Improve follow-up procedures for unpaid invoices.

Real world scenarios

  • A service business in Denver tracks every step from sale to payment receipt.
  • An online platform monitors order processing and cash collection times.
  • A small firm identifies delays in its revenue cycle to speed up collections.

Related terms

Entrepreneurial Finances