Xero Metrics – Page 2

Gross Profit is the revenue remaining after subtracting the Cost of Goods Sold (COGS). It shows how efficiently a company produces and sells its goods or services, and how much revenue is available to cover operating costs and generate net income.

The Invoices metric counts the number of invoices you have sent to your customers. It is helpful to track Invoices to keep a tab on what is owed to you.

Net Burn, often referred to as Burn Rate, is the amount a company is losing per month as they burn through their cash reserves. It occurs when a company’s operating costs are higher than their revenue. A company that is profitable and generating cash has a "negative Net Burn".

Net Cash Flow is the difference between all cash inflows and all cash outflows for a given period, showing whether a business generated or consumed cash.

Net profit is the value that remains after all expenses are subtracted from the company's total income. It is one of the best ways to determine a business' profitability and is often referred to as the bottom line. Net profit represents the ultimate financial outcome of all business activities during a specific period and appears as the final line item on the income statement, hence the term "bottom line."

Net Profit Margin shows net profit as a percentage of total revenue. It gives the net profit earned for every dollar of revenue generated and is a good indicator of profitability and operating expense management.

Operating expenses (OPEX) are the costs a business incurs through normal operations that are not directly tied to producing goods or services. Per QuickBooks, OPEX represents the Expenses section on the Profit & Loss statement, excluding cost of goods sold (COGS) and other expenses. Common examples include sales and marketing costs, administrative salaries, and research and development expenditures.

Profit per Employee is a measure of Net Income for the past twelve months (LTM) divided by the current number of Full-Time Equivalent employees. Because labour needs differ across sectors, this ratio is often used to compare companies within the same industry.

Revenue is the total income generated from a company's primary business operations before deducting any costs or expenses. Often called the "top line" because it appears at the top of the income statement, revenue represents the gross amount earned from core business activities such as product sales, service fees, subscriptions, or licensing agreements.

Revenue per Employee is a measure of the total Revenue for the last twelve months (LTM) divided by the current number of Full-Time Equivalent employees. Also known as Revenue to Employee Ratio, this ratio is among the most universally applicable and is often used to compare companies within the same industry.