Don’t Just Know Your Revenue – Know These 3 KPIs to Lead with Confidence
As Saudi businesses scale and markets mature, executives and founders must elevate their financial thinking beyond topline sales. Strategic decisions require precision—and precision requires knowing the right numbers.
Here are 3 non-negotiable financial KPIs every executive in Saudi Arabia must master to drive sustainable growth:
1. Gross Margin – Your True Profitability
It’s not how much you sell—it’s how much you keep after costs.
Why it matters: Gross margin shows how efficiently your business delivers value. It’s what’s left after covering the direct costs of goods or services. Weak margins = weak ability to reinvest.
How to use it:
- Set margin targets by product/service.
- Monitor trends across months and market segments.
- Use it to decide pricing strategy and cost control priorities.
2. Customer Acquisition Cost (CAC) vs. Customer Lifetime Value (CLTV)
Are you spending more to acquire a customer than you earn from them?
Why it matters: CAC tells you how much it costs to get one customer. CLTV tells you how much that customer brings in over their relationship with you. The ratio of CLTV to CAC is critical.
How to use it:
- Benchmark your CAC by channel.
- Improve onboarding and retention to increase CLTV.
- Aim for a CLTV:CAC ratio of at least 3:1.
3. Cash Flow Forecasting – Your Strategic Breathing Room
Profit ≠ cash in the bank. Many profitable businesses fail because they run out of cash.
Why it matters: Cash flow planning helps you manage obligations, make hiring or inventory decisions, and stay resilient through market fluctuations.
How to use it:
- Forecast inflows and outflows monthly and quarterly.
- Stress test your cash runway under different growth or crisis scenarios.
- Use forecasting to plan investments or debt wisely.
