Tag: Ratios
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A Quick Guide to Managing Labor Efficiency
Let’s look at a concept that can help both service-based businesses and product-based businesses with managing arguably their largest expense line. It’s called the Labor Efficiency Ratio (LER). What is it? It’s a simple but powerful metric used to measure the effectiveness of labor costs in any business. To calculate your LER, take your gross profit and divide…
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The Monthly Financial Review (MFR)
Ask 10 different finance pros what their monthly review process looks like and you’ll likely get 9-10 different responses. So what is it? Monthly Financial Review (MFR) — Checklist of financial data and review procedures conducted every month (or 30 days) after your books are closed and financial statements prepared. After the month ends and your financials are…