Investor Deck
Key Financial Metrics and Ratios
This section provides an overview of crucial financial metrics and ratios that are essential for evaluating the startup's financial health, efficiency, and overall performance. These include metrics like return on investment (ROI), profit margins, and various liquidity and leverage ratios.
SECTION
Financials (Critical for Investment)
IMPORTANCE
9
/10
Key financial metrics and ratios allow investors to quickly assess the financial viability and stability of the startup. They are used to compare the startup’s performance against industry benchmarks and competitors, offering a clear picture of where the company stands in terms of financial management.
WHAT SHOULD BE INCLUDED:
Return on Investment (ROI): Measures the profitability and efficiency of investments.
Profit Margins: Includes gross, operating, and net profit margins to show profitability at different stages of operations.
Liquidity Ratios: Such as current ratio and quick ratio, which indicate the company’s ability to cover short-term liabilities with its assets.
Leverage Ratios: Including debt-to-equity and debt-to-asset ratios, assessing the company’s debt levels relative to its equity and assets.
Efficiency Ratios: Like inventory turnover and accounts receivable turnover, showing how well the company manages its assets.
TIPS
Selection of Metrics: Choose metrics that are most relevant to your industry and business model to provide meaningful insights.
Benchmark Comparison: Include industry benchmarks or competitor comparisons to contextualize the startup’s performance.
Trend Analysis: Show trends over time for these metrics to highlight improvements or address any declines in performance.
EXAMPLES
Apple Inc.: Regularly reports high ROI and profit margins, demonstrating efficient capital use and strong profitability, benchmarked against other tech giants.
Walmart: Uses efficiency ratios like inventory turnover to illustrate operational efficiency, showcasing how well it manages its massive supply chain compared to retail industry norms.
Tesla: Monitors leverage ratios closely, providing insights into how it finances its ambitious growth and capital-intensive projects relative to its equity.