In this installment of Accounting Basics for Small Contractors, we’ll look at specific KPIs (Key Performance Indicators) (aka benchmarks) that contractors should be monitoring.
Accounting Basics for Small Contractors — Benchmarking
Current assets include cash and any other asset that can be turned into cash within one year of the date of the balance sheet. The acid test, or quick, ratio is a more stringent current ratio. The debt-to-equity ratio calculates the proportion of the company’s assets supplied by the creditors versus the amount supplied by the owners. Inventory turnover is the number of times per period that the inventory turns over.