Overview
The KPIs page in RunSmart displays a collection of key performance indicators (KPIs) that help you evaluate your business’s financial health and future outlook. These charts turn complex numbers into visual trends, making it easier to spot what’s going well and where you might need to make changes. Understanding these metrics can help you make smarter decisions—without needing a finance degree.
📊 1. Margins
What it shows:
Margins tell you how much profit you keep after paying your expenses. For example, if you earn $1 and have a 20% margin, you keep 20 cents in profit.
Why it matters:
Margins show how efficiently your business turns sales into profit. High margins mean you’re keeping more of what you earn. Low margins could mean your costs are too high or your pricing is too low. More sales don't always mean more profit—if your costs rise faster than revenue, your bottom line can suffer. Margins help catch this early.
What to watch for in the chart:
📈 Upward trend: You’re managing costs well or charging enough for your products/services
📉 Downward trend: Your costs might be creeping up or you’re discounting too much
Pro tip:
Compare with NTM Net Income Growth. If both are rising, your profits are growing in a healthy way. If margins drop while income is flat, it may be time to adjust pricing or reduce unnecessary spending.
💼 2. Equity Book Value
What it shows:
This is your business’s net worth—what would be left for the owner(s) if everything was sold and debts were paid.
Why it matters:
It’s a good indicator of long-term financial health. A rising number means your business is gaining value. A falling number could mean losses or rising debt. Think of it like your business’s savings account—it should grow steadily over time.
What to watch for in the chart:
📈 Rising equity: You’re growing assets or paying off debt
📉 Falling equity: You may be losing money or relying more on borrowed funds
Pro tip:
Compare with Debt to Capitalization to understand how your growth is being funded—through profit or through debt.
💳 3. Debt to Capitalization
What it shows:
This tells you what percent of your business is financed by debt. For example, if this is 40%, then 40% of your business is funded by loans and 60% by owner equity.
Why it matters:
Too much debt can be risky and expensive due to interest. A lower percentage means you’re less reliant on borrowing. Debt can be useful, but only if it’s helping your business grow in a way that pays off more than it costs.
What to watch for in the chart:
📉 Decreasing ratio: You’re paying down debt or increasing equity—a good sign
📈 Increasing ratio: You’re taking on more debt, which could raise risk
Pro tip:
Pair with Interest Coverage Ratio. If your debt is rising but you’re still able to comfortably cover interest, you're okay. If not, it’s a red flag.
💰 4. Interest Coverage Ratio
What it shows:
How many times you can pay your interest expenses with your operating income. For example, a ratio of 5 means you earn 5 times what you need to pay in interest.
Why it matters:
This shows how comfortably your business can cover loan interest. Higher is better. If this number gets too low, lenders may be hesitant to extend more credit, or they may charge you higher interest rates.
What to watch for in the chart:
📈 Higher ratio: You have plenty of income to handle debt payments
📉 Lower ratio: Interest costs may be eating into your profits
Pro tip:
Use this alongside Net Debt/EBITDA to get the full picture of your debt health.
🧾 5. Net Debt/EBITDA
What it shows:
This shows how many years it would take to pay off your debts using your earnings before interest, taxes, depreciation, and amortization (EBITDA).
Why it matters:
Lower is better—it means you could pay off debt faster with your current income. If this number is climbing, it’s a sign to check whether your debt is growing faster than your income.
What to watch for in the chart:
📉 Falling ratio: You’re paying off debt or earning more
📈 Rising ratio: You may be taking on more debt or your earnings are falling
Pro tip:
Use with Interest Coverage Ratio to assess whether your debt is sustainable.
📈 6. NTM Sales Growth
What it shows:
This estimates how much your sales will grow over the next 12 months. For example, if last year you sold $100,000 and this year you’re on track for $110,000, that’s 10% growth.
Why it matters:
Rising sales mean customers like what you’re offering. Flat or declining sales could point to a problem with marketing, competition, or product demand. It’s also important to check that you’re not spending too much to make those sales happen.
What to watch for in the chart:
📈 Sales increasing: Business is expanding and attracting more customers
📉 Flat/declining: May need to refresh your strategy or offerings
Pro tip:
Compare with NTM Net Operating Income Growth. If sales are growing but income isn’t, your cost base may need attention.
📊 7. NTM Net Operating Income Growth
What it shows:
This shows how much your operating profit is expected to grow in the next year—before interest and taxes.
Why it matters:
It helps you see whether your business operations (not one-time events) are becoming more efficient. This metric focuses on your core business activity—how well you’re running day-to-day.
What to watch for in the chart:
📈 Upward trend: You’re managing costs well and increasing profits
📉 Downward trend: Your costs might be growing faster than your revenue
Pro tip:
Check alongside Margins and NTM Sales Growth to confirm healthy, sustainable growth.
💵 8. NTM Net Income Growth
What it shows:
This is the bottom-line forecast—how much total profit you expect to earn after all costs, interest, and taxes over the next 12 months.
Why it matters:
It’s the clearest snapshot of whether your business is growing profitably overall. This metric reflects everything—your sales, costs, taxes, and financing choices. Use it to confirm that your strategy is working as a whole.
What to watch for in the chart:
📈 Rising net income: Your business is becoming more profitable
📉 Falling net income: Could be a sign of trouble—rising costs, weak sales, or other issues
Pro tip:
Compare with Margins and Operating Income. If net income is rising but others are flat, the improvement may be due to one-time items like tax breaks. You want to ensure growth is coming from business performance, not temporary factors.
Final Thoughts
Each KPI gives you one piece of the puzzle. Together, they help you understand where your business stands and where it’s going. Keep an eye on trends over time—not just individual numbers—and always use more than one chart to get the full picture. With these tools, you can make confident decisions and grow your business wisely.