Financial statements aren’t just for tax season—they’re your best tool for making smart business decisions. If you run a small business in Charlotte, NC, understanding basic financial ratios can help you measure performance, improve operations, and increase profitability.

At Polaris Tax & Accounting, we help Charlotte entrepreneurs move beyond raw numbers and start using real financial analysis to run their business like a pro.

What Is Financial Analysis—and Why Should You Care?

Financial analysis is the practice of evaluating your business’s performance using data from your bookkeeping system—typically your profit & loss (P&L), balance sheet, and cash flow statements.

Charlotte business owners who understand their numbers can:

  • Track growth more clearly
  • Spot inefficiencies early
  • Justify price changes
  • Secure financing
  • Plan tax strategy more effectively

5 Key Ratios Every Charlotte Business Owner Should Know

These aren’t Wall Street metrics—they’re practical tools you can run from your bookkeeping reports in minutes.

1. Gross Profit Margin

Formula: (Revenue – Cost of Goods Sold) / Revenue

This ratio tells you how efficiently you’re delivering your product or service. A healthy margin varies by industry, but if your margin is shrinking month-to-month, it’s a red flag.

2. Net Profit Margin

Formula: Net Income / Revenue

This shows how much profit you’re keeping after all expenses. A declining margin can signal expense creep, poor pricing, or underperforming areas of the business.

3. Current Ratio

Formula: Current Assets / Current Liabilities

This liquidity ratio tells you whether your business can cover short-term obligations. A current ratio under 1.0 may indicate cash flow problems.

4. Revenue Per Employee

Formula: Total Revenue / Number of Employees

A great productivity benchmark, especially for service-based businesses in Charlotte. Use it to evaluate hiring decisions and team efficiency.

5. Accounts Receivable Turnover

Formula: Net Credit Sales / Average Accounts Receivable

This tracks how quickly you’re collecting payments. A lower turnover means your cash is tied up with slow-paying clients.

Where This Data Comes From (Hint: Your Books)

All of these ratios depend on accurate, up-to-date bookkeeping. If your books are messy or behind, these numbers will mislead you.

At Polaris, our Charlotte-based team ensures:

  • Your COGS is properly separated from overhead
  • Balance sheet accounts are reconciled monthly
  • Owner draws and personal expenses don’t distort net income

Turn Data Into Decisions

Here’s how our Charlotte clients use financial analysis in real life:

  • Raising prices after identifying margin compression
  • Improving collection policies when A/R turnover drops
  • Justifying financing requests with clean, credible ratios
  • Cutting non-performing services after segment-level analysis

Polaris Makes This Easy

We don’t just send you a report—we interpret the numbers and explain what they mean for your business.

With our monthly bookkeeping service, you get:

  • Clean P&Ls and balance sheets you can trust
  • Ratio analysis and KPI tracking
  • Ongoing conversations to guide decisions

Ready to Get a Handle on Your Financial Health?

Schedule a consultation with our Charlotte bookkeeping team. Let’s turn your books into a business intelligence tool—not just a year-end chore.

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