10 key figures every managing director should know.

Why numerical literacy determines growth, stability, and crisis resilience.

Companies rarely fail because they lack vision. They fail because of incorrect assumptions about their economic reality. Many management teams know how high their sales are and whether they made a profit at the end of the year. But these two figures are not enough to strategically manage a company.

Anyone who bears entrepreneurial responsibility must understand how resilient the business model actually is, how much risk is inherent in the cost structure, and which levers really influence future viability. Key figures are not an end in themselves in controlling—they are a central management tool.

Below are ten key figures that every business manager should not only know, but also be able to interpret.

1. Liquidity – the silent survival indicator.

It is not profit that determines a company's survival, but liquidity. Especially in periods of growth, a dangerous dynamic often arises: accounts receivable increase, inventory grows—both of which tie up capital. At the same time, suppliers expect timely payment, and additional employees increase monthly fixed costs.

The company is growing—but liquidity is coming under pressure.

A key early warning indicator is the quick ratio. It compares cash and cash equivalents and current receivables with current liabilities. The benchmark is 100%. This means that current liabilities can be covered by available funds and receivables. If the value falls significantly below this, there is a risk of liquidity problems.

• The cash ratio compares liquid assets with short-term liabilities.
• The current ratio compares current assets with short-term liabilities.

In operational management, liquidity ratio 2 is particularly important, as it provides the most realistic assessment of short-term solvency.

A monthly liquidity forecast—ideally rolling over six to nine months—creates transparency. It shows at an early stage when financing measures, cost adjustments, or price optimizations will become necessary.

2. Contribution margin – the economic truth behind sales.

Revenue alone is an activity indicator. What matters is what remains after variable costs have been deducted. The contribution margin shows which products, services, or customers actually contribute to covering fixed costs.

In practice, it often turns out that individual large customers generate high sales, but only low or even negative contribution margins. Without differentiated costing, this remains invisible. Strategic management therefore means knowing the contribution margins per product line, project, or customer segment.

It is not uncommon for the solution to earnings problems to lie not in higher sales, but in better sales.

3. Break-even point – the threshold to stability.

The break-even point shows the level of sales required to cover all fixed costs. This key figure clearly shows how robust or vulnerable a business model is.

Companies with high fixed costs—such as those related to personnel, infrastructure, or long-term contracts—are sensitive to declines in sales. If you know your break-even point, you can run through different scenarios: What happens if sales decline by ten percent? Which cost structures allow for flexibility, and which do not?

This transparency is a strategic advantage, especially in volatile markets.

4. EBIT and EBITDA – operating performance.

EBIT (earnings before interest and taxes) and EBITDA (earnings before interest, depreciation, and amortization) provide information about a company's operating profitability, regardless of its financing structure and tax effects.

These key figures are particularly relevant for banks, investors, and potential buyers. They show how efficient the core business is.

But be careful: strong EBITDA combined with weak cash flow can indicate structural problems, such as high receivables or investment pressure. That is why EBIT and liquidity should always be considered together.

5. Equity ratio – the indicator of stability.

The equity ratio shows how solid a company's finances are. A strong equity base increases crisis resistance, improves the negotiating position with banks, and creates entrepreneurial freedom.

Companies with low equity ratios are significantly more limited in their ability to act during difficult economic periods. Strategic decisions—such as major investments or expansions—should therefore always be evaluated in the context of the capital structure.

6. Personnel cost ratio – the structural lever.

In many companies, personnel costs are the largest fixed cost item. The personnel cost ratio—i.e., the ratio of personnel costs to sales—provides information about how efficiently the organization is operating.

Growth is often hastily addressed with new hires. However, if processes are not sufficiently structured, this leads to a permanent fixed cost burden. Sustainable growth comes from scaling efficiency—not just from hiring more employees.

7. Working capital – capital tied up in day-to-day business.

Working capital describes the capital tied up in operating activities, particularly in accounts receivable, inventories, and accounts payable.

There is often considerable potential for optimization here. Shorter payment terms, more efficient receivables management, or optimized warehousing can free up liquidity without having to generate additional sales.

Professional working capital management is crucial for financial stability, especially in capital-intensive industries.

This applies, for example, to construction companies or a wine shop with high inventory levels.

8. Customer acquisition cost and customer lifetime value – the logic of growth.

Growth is only healthy if the cost of customer acquisition is in reasonable proportion to the long-term customer value.

The customer acquisition cost (CAC) shows what a new customer actually costs. The customer lifetime value (CLV) describes the expected total value of a customer over the entire business relationship.

If CLV is not significantly higher than CAC, growth becomes expensive and potentially dangerous. Sustainable business models ensure that customer value significantly exceeds acquisition costs.

9. ROI – measures how efficiently capital is being used.

The return on investment (ROI) shows how profitably the capital employed is working. It compares the profit to the total capital invested.

Put simply, ROI answers a key management question: How much return do we generate for every dollar invested?

A company can grow, increase sales, and even report profits—yet still use capital inefficiently. That's exactly what ROI reveals.

A low ROI can have various causes:

• Excessive capital tied up in working capital
• oversized infrastructure
• inefficient investments
• low margins in relation to capital investment

ROI is particularly crucial when it comes to investment decisions. New machines, additional locations, or staff recruitment should not only make sense from an operational perspective, but also generate an appropriate return on investment.

10. Scenario analysis – the key figure behind all key figures.

Perhaps the most important skill for a management team is not simply reading numbers, but thinking in terms of scenarios.

What happens when prices increase by five percent?
How does a decline in sales affect liquidity and equity?
What impact does an additional manager have on the break-even point?

Companies that regularly perform sensitivity and scenario analyses make more informed decisions and respond more quickly to changes.

Conclusion: Key figures are management knowledge.

Numbers alone do not run a company. But without numbers, management becomes a blind flight. The job of a managing director is not to be an accountant. The job is to understand economic relationships, identify risks early on, and make strategic decisions on a sound basis.

Those who know their key figures not only gain control—they also gain entrepreneurial sovereignty.