10 Monthly Financial Numbers a Small Business Must Track

Ten numbers, checked once a month, tell a small business owner almost everything they need: whether they are making money (sales, gross margin, net profit, break-even), whether they have money (cash runway, receivable days, inventory days, payables), and whether they can meet obligations on time (GST and TDS payable, loan coverage). Each takes a few minutes to calculate from your accounting software or ledgers. The dashboard below works through all ten for an illustrative ₹12 lakh-a-month distributor.

Why monthly, and why these ten

Annual accounts arrive too late to act on. Weekly figures are noisy. A monthly review, done in the first week of the next month, is frequent enough to catch problems and fits naturally around GST and TDS deadlines.

These ten numbers are chosen because each one answers a decision an owner actually faces: price higher, chase a customer, cut stock, delay hiring, set money aside for tax, or talk to the bank. Keep business and personal transactions in separate accounts first, or none of the numbers will be reliable; see separate personal and business finances.

The worked example

The figures are illustrative. A Nagpur distributor of packaged foods closes September with these numbers (all excluding GST unless stated):

• Sales: ₹12,00,000
• Cost of goods sold: ₹9,00,000
• Salaries ₹1,20,000; rent ₹40,000; other overheads ₹30,000; depreciation ₹10,000; loan interest ₹20,000
• Loan principal repaid: ₹30,000
• Closing bank balance: ₹4,00,000
• Receivables ₹18,00,000; inventory ₹13,50,000; payables ₹6,00,000
• GST: 18% on sales; purchases also at 18% with full input credit (simplified)

The ten numbers

1. Sales, and the trend

₹12,00,000 this month. On its own, a sales figure says little; compare it with the same month last year (to remove seasonality) and with the trailing three-month average. Track sales by top customers and top products too: if one customer is more than about a quarter of sales, losing them is a business-level risk.

2. Gross margin

Gross profit = ₹12,00,000 − ₹9,00,000 = ₹3,00,000. Gross margin = ₹3,00,000 ÷ ₹12,00,000 = 25%.

A falling gross margin with rising sales usually means discounting or rising input costs not passed on. Review it by product line. Markup vs profit margin explains why pricing on cost often undershoots the margin you planned.

3. Net profit and net margin

Operating expenses = ₹1,20,000 + ₹40,000 + ₹30,000 + ₹10,000 + ₹20,000 = ₹2,20,000. Net profit before tax = ₹3,00,000 − ₹2,20,000 = ₹80,000, a net margin of 6.67%.

4. Break-even sales and margin of safety

Treating all ₹2,20,000 of overheads as fixed and the 25% gross margin as the contribution margin: Break-even sales = ₹2,20,000 ÷ 0.25 = ₹8,80,000. Margin of safety = (₹12,00,000 − ₹8,80,000) ÷ ₹12,00,000 = 26.67%.

The method is covered step by step in break-even sales calculation.

5. Cash balance and runway

Monthly fixed cash outflow = salaries ₹1,20,000 + rent ₹40,000 + overheads ₹30,000 + interest ₹20,000 + principal ₹30,000 = ₹2,40,000. (Depreciation is excluded because it is not a cash payment; principal is included because it is.) Runway = ₹4,00,000 ÷ ₹2,40,000 = 1.67 months.

That is thin. If two big customers paid late in the same month, this distributor would be drawing heavily on its overdraft. Many advisers suggest holding at least two to three months of fixed cash costs in cash or unused limits.

6. Days sales outstanding (receivable days)

DSO = ₹18,00,000 ÷ ₹12,00,000 × 30 = 45 days.

Back it up with an ageing report: how much is 0–30, 31–60 and 60+ days old. A rising DSO is the most common reason profitable businesses run out of cash, as explained in profit vs cash flow.

7. Days inventory outstanding (stock days)

DIO = ₹13,50,000 ÷ ₹9,00,000 × 30 = 45 days.

List items that have not moved in 90 days. Clearing them releases cash and warehouse space.

8. Payables, including MSME dues

DPO = ₹6,00,000 ÷ ₹9,00,000 × 30 = 20 days.

Combined: cash conversion cycle = 45 + 45 − 20 = 70 days. The cash conversion cycle guide shows how to shorten it.

Separate out amounts owed to micro and small suppliers registered on Udyam. As of October 2026, they must be paid within the agreed term, capped at 45 days, under the MSMED Act; amounts unpaid beyond that are deductible only when paid under Section 37(2)(g) of the Income-tax Act, 2025 (old Section 43B(h)).

9. GST and TDS payable

Output GST = 18% × ₹12,00,000 = ₹2,16,000. Input tax credit = 18% × ₹9,00,000 = ₹1,62,000 (assuming purchases equal cost of goods sold, a simplification). Net GST payable in cash ≈ ₹54,000.

Move this amount to a separate account the day you close the month. Monthly GSTR-3B filers pay by the 20th of the following month (quarterly QRMP filers have different dates), and TDS deducted is generally deposited by the 7th of the following month. Late payment attracts interest, and missed GST filings can block your customers' input credit, which hurts relationships. The GST calculator helps split GST-inclusive amounts.

10. Debt service coverage ratio (DSCR)

DSCR = (Net profit + Depreciation + Interest) ÷ (Interest + Principal) = (₹80,000 + ₹10,000 + ₹20,000) ÷ (₹20,000 + ₹30,000) = ₹1,10,000 ÷ ₹50,000 = 2.2

Lenders commonly look for at least 1.25 to 1.5 on a sustained basis. A DSCR of 2.2 means this business could take on some additional debt, but its thin cash runway suggests building a reserve first. (This simplified version ignores income tax; lenders usually use profit after tax.)

The one-page dashboard

A 30-minute monthly routine

1. Day 1–3: reconcile bank accounts and post all sales and purchase invoices.
2. Day 3–5: pull the profit-and-loss, receivables ageing, stock summary and GST reports.
3. Fill the dashboard, compare with last month and the same month last year.
4. Pick one action for each number that moved the wrong way: a customer to call, a stock line to clear, a price to revise.
5. Transfer GST, TDS and an advance-tax provision to a tax account.
6. Share it with your partner, accountant or banker. A banker who sees disciplined monthly numbers is easier to approach for a limit increase.

Key takeaways

• Track ten numbers monthly: sales, gross margin, net margin, break-even, cash runway, DSO, DIO, DPO, GST payable and DSCR.
• In the illustrative example, a profitable business with a 6.67% net margin had only 1.67 months of cash runway.
• Receivable and stock days explain most gaps between profit and cash.
• Set aside GST and TDS as soon as the month closes, and track MSME supplier dues against the 45-day limit.
• Keep DSCR comfortably above about 1.25 before taking on new loans.