FINANCIAL KPIs QUICK REFERENCE CHEAT SHEET
Last Updated: February 2026

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ESSENTIAL FINANCIAL KPIs
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KPI                    | Formula                              | GC Target | Sub Target
------------------------|--------------------------------------|-----------|------------
Gross Profit Margin    | (Revenue - Direct Costs) ÷ Revenue × 100 | 15-25%    | 25-35%
Net Profit Margin      | Net Income ÷ Revenue × 100          | 2-5%      | 5-10%
Overhead Rate          | Overhead Costs ÷ Direct Costs × 100 | 10-20%    | 10-20%
Current Ratio          | Current Assets ÷ Current Liabilities| 1.2-1.5+  | 1.2-1.5+
Working Capital        | Current Assets - Current Liabilities| Positive  | Positive
AR Days                | (AR ÷ Revenue) × Days in Period     | 30-45     | 30-45
AP Days                | (AP ÷ Cost of Sales) × Days in Period| 30-45     | 30-45
Backlog                | Sum of Unbilled Contracts           | 6-12 mo   | 6-12 mo
WIP Over/Under         | Billings - (Costs + Earned Profit)  | 5-10% over| 5-10% over
Debt-to-Equity         | Total Debt ÷ Owner's Equity         | <2.0      | <2.0

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RED FLAG INDICATORS
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IMMEDIATE ACTION REQUIRED:
☐ Current Ratio < 1.0
☐ AR Days > 60
☐ Negative Working Capital
☐ Net Margin < 0%
☐ Debt-to-Equity > 3.0

WATCH CLOSELY:
☐ Current Ratio 1.0-1.2
☐ AR Days 45-60
☐ Gross Margin declining
☐ Backlog < 3 months
☐ WIP significantly underbilled

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FREQUENCY
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Monthly: All KPIs except Debt-to-Equity
Quarterly: Debt-to-Equity Ratio

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INDUSTRY BENCHMARKS
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GENERAL CONTRACTORS:
Gross Margin:  18%+ (Good), 12-18% (Average), <12% (Poor)
Net Margin:    3%+ (Good), 1-3% (Average), <1% (Poor)
Current Ratio: 1.5+ (Good), 1.2-1.5 (Average), <1.2 (Poor)
AR Days:       <40 (Good), 40-60 (Average), >60 (Poor)

SPECIALTY SUBCONTRACTORS:
Gross Margin:  30%+ (Good), 25-30% (Average), <25% (Poor)
Net Margin:    8%+ (Good), 5-8% (Average), <5% (Poor)
Current Ratio: 1.5+ (Good), 1.2-1.5 (Average), <1.2 (Poor)
AR Days:       <35 (Good), 35-50 (Average), >50 (Poor)

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QUICK CALCULATIONS
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Monthly AR Days = (AR Balance ÷ Monthly Revenue) × 30
Monthly AP Days = (AP Balance ÷ Monthly Costs) × 30
Backlog Months = Total Backlog ÷ Average Monthly Revenue

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NOTES
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- Review trends over time, not just single months
- Compare to industry benchmarks for your company type
- Take action on red flags immediately
- Green indicators = continue current practices
- Yellow indicators = monitor closely
- Red indicators = investigate and take corrective action